How To Protect Users Funds: DigiFinex Co-founder Kiana Shek At TEAMZ Blockchain Summit
TEAMZ Blockchain Summit was held in Tokyo, Japan from April 6th to 7th, 2019. The summit was hosted by TEAMZ, co-hosted by top blockchain media such as Cointelegraph and Jinse Finance. This event drew in thousands of people, many coming from all over the world. The concept is to unite traditional finance with the blockchain ecosystem, discuss the current development of blockchain, cryptocurrencies as well as their potential in the near future.
Kiana Shek, the co-founder of DigiFinex Exchange, was invited to attend the summit and share her insights on the topic of “Fighting Hackers: How to Protect Users Funds.” Below is our recap of the questions and Kiana’s answers.
Yanying (Moderator): Over $1.5 billion cryptocurrency was lost due to exchange hacks, could you tell us more about the background of these incidents?
Kiana: Cryptocurrency exchanges are the main targets of hacking because, on one hand, crypto is relatively anonymous, unregulated and at the same time it’s also immutable, which makes it easier to transfer but harder to trace. On the other hand, the cryptocurrency trading industry is young and growing rapidly with a huge amount of daily transactions. Generally speaking, the crypto exchange security infrastructure is catching up with the speed of its growth, but there are many hidden vulnerabilities and it is relatively easy to attack, compared to a bank vault, for example.
The security threats faced by cryptocurrency exchanges include: misconfigurations, DDoS attacks, server-side web application vulnerabilities, office computer security issues, and even internal personnel attacks. For an exchange with a large number of users, there is also the problem of users being tricked by phishing website to obtain their account login information.
Yanying: What should we do to prevent a “QuadrigaCX Incident” from happening again?
Kiana: QuadrigaCX Exchange founder transferred some of the cryptocurrencies to cold wallets that only he held the private keys. When he suddenly passed away, no one else was able to access the cold wallets, resulting in a loss of $145 million of users funds. I think that if an exchange stores the users assets in cold wallets, it should be disclosed to its users. At the same time, exchange users should also learn to protect their own assets, do not store passwords in the browser, and store funds in their own cold wallets.
Yanying: Do you think it is safe enough to invest in cryptocurrencies for larger financial institutions with retirement funds and life savings?
Kiana: Cryptocurrency is an emerging financial investment market, and it’s still very small compared to other traditional financial markets. Security and compliance are the only way for the development of digital assets. With the growing maturity of blockchain technology and regulatory policies, I believe that cryptocurrencies have very good future prospects. This year we saw two crypto indices provided by global financial media Reuters and Bloomberg, as well as Nasdaq and Germany’s Brose Stuttgart. There is a strong signal of traditional stock exchanges to enter the cryptocurrency market.
After more than a year of market correction, some of the cryptocurrencies are reaching a relatively reasonable investment price. The mainstream ones including Bitcoin are better options. All investments involve some degree of risk. Personally I think cryptocurrency is a good investment choice.
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