Will Crypto Exchange Hold Accountability for Security Breaches and Lost Tokens?

A crypto exchange must ensure transparency and anti-hacking protection for future security breaches

It is very well known that the global cryptocurrency market is highly volatile for trading cryptocurrencies for a long period of time. But crypto investors are still not sure about depending on a crypto exchange knowing that there will not be potential cyberattacks in the future. Cybercriminals eagerly wait for weak links to break the cybersecurity approaches of a crypto exchange and achieve security breaches successfully. Cybersecurity is one of the key elements in a crypto exchange to integrate for ensuring no security breaches and lost cryptocurrencies for crypto investors. But cyber attackers are developing modern and advanced approaches of cyberattacks to steal cryptocurrencies from a crypto exchange.

There have been multiple studies on how a crypto exchange can get security breaches and other forms of cyberattacks despite having strong cybersecurity approaches. The substantial growth of cryptocurrencies has not only attracted crypto investors but also cyberhackers towards crypto wallets. One of the key reasons is that a crypto exchange and millions of crypto wallets are always connected to the internet. The internet provides a penetrable cybersecurity wall with one crypto investor having access to crypto wallets without any permission from a third party — there is no multi-signature security.

Often, it has been observed that a crypto exchange will look out for ways to retrace the lost fund in the process that were lost during the extraction of private keys. It also tends to re-assure that crypto investors will be indemnified from personal funds regarding any security breach or lost the token case.

In some cases, a crypto exchange must be accountable for security breaches and cryptocurrency hacks because millions of crypto investors tend to trust the platform with their money and crypto tokens. A crypto exchange should look out for any security loophole that may provide an opportunity for security breaches and other cyberattacks. It can become less vulnerable with the use of multi-signature cold wallets that can be used offline.

There are multiple security breach cases and cryptocurrency hacking cases from the past in the highly volatile cryptocurrency market. It is highly crucial to perform due diligence before trusting any crypto exchange with crypto wallets, digital assets, and thousands of cryptocurrencies. There are potential chances for a crypto exchange platform to be accountable for any mishap with crypto wallets.

That being said, crypto investors must be very careful in selecting any crypto exchange. They should consider some of the following factors — regulations, anti-virus protection, transparency, reputation, and terms and conditions.