What Is Pirate Hacking And How Can You Keep Your Crypto Safe?

It is difficult to think of any industry where criminals do not operate in, especially one related to currency. Always on the lookout for the next vulnerable spot, pirate hackers are groups or individuals which specifically target crypto users and exchanges to try and steal their digital funds. They do this by hijacking user data to steal funds from unsuspecting victims.

While more traceable than cash thefts, catching pirate hackers is a complex challenge, as authorities normally only have a wallet address to go by. Unless they manage to link the address to a person, the investigation remains unsolved. This fact, together with the continual increase in cryptocurrency users, is seeing a rise in pirate hacking across the world.

Exchanges are Not Immune to Pirate Hacking

Unfortunately, even after having invested in state-of-the-art security systems and anti-fraud mechanisms, some cryptocurrency exchanges still become victims of these criminals. Even the biggest sometimes become vulnerable, as what happened with Binance at the beginning of 2019.

One of the largest exchanges in the world became the latest in a series of victims of pirate hackers, who succeeded in taking $41 million. When the exchange’s CEO, Zhao Changpeng, informed users that all of their losses will be refunded by the company, it brought a sigh of relief to the crypto community.

Unfortunately, the same cannot be said about a New Zealand-based exchange, Cryptopia, which was hacked in January 2019. The company couldn’t take the hit of the $16 million it lost in this attack, and following pressures from creditors it ceased all operations in May. This event left many investors and trading looking for alternatives to the Cryptopia exchange.

A year prior to Cryptopia’s hack, the Japanese exchange, Coincheck fell victim to the largest theft of cryptocurrencies to date. Yet unknown pirate hackers stole the equivalent of $530 million. In this event too, users were compensated by the company’s own capital.

Major Exchanges which have Never been Hacked

Whilst most major exchanges have fallen victim to hacks over time, there are still some who have managed to protect themselves and their users flawlessly. Such exchanges include:

• CEX
• Changelly
• Kraken

The reputation held by these exchanges is one of not only being reliable, but also extremely safe. However, whilst exchanges do their bit to protect themselves and their users from pirate hackers, you also need to do your bit.

Protecting Yourself from Pirate Hackers

No matter with whom you hold an exchange account, your account is only as safe as you make it. Ensure you have enabled 2FA, and store your private keys and security passwords securely. Also ensure that your transactions are confirmed through a multisignature or more than just one key.

Another important protection tactic is to keep currency which you do not plan to use imminently in a cold storage, hardware wallet. These wallets are completely disconnected from the web and cannot be hacked, at least until you re-connect them.