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What’s Next For KuCoin? Resuming Services Post Hack, Being Compliant, And Its Future


Cryptocurrency exchange KuCoin has been bringing in more services back online after completing its wallet security strategy upgrade following the recent hack on Sept.26, Saturday.

The Seychelles-based KuCoin confirmed it would now be enabling deposits and withdrawals for Bitcoin (BTC), Ether (ETH), and the Tether (USDT) stablecoin after enhancing the wallet security for those cryptocurrencies in a service update early on Wednesday, after the $280 million hack weeks earlier.

Regarding the overhaul, KuCoin noted that new deposit addresses have been generated by all projects that have resumed withdrawal / deposit services and, although the existing addresses will still operate, its suggested users to update. Users can now deposit and withdraw 75 cryptocurrencies on the exchange at the time of writing.

KuCoin announced that its hot wallets containing BTC, ETH, and ERC-20 tokens were affected by the breach. Major crypto projects have eventually frozen a significant number of the stolen ERC-20 tokens on their end. Although the exchange initially projected consumer losses to be around $150 million, leading blockchain analysis firm Chainalysis projected losses more than $275 million worth of cryptocurrency.

Johnny Lyu stated on Oct. 3 that the alleged hackers had been identified and that he had given significant evidence to law enforcement agencies.

However, after the tweet, there are no follow-up reports about the hackers or their identity. He also said that $64 million of the stolen funds had been secured by the exchange, bringing the total retrieved assets to $204 million as of October 1.

An Alliance For The Security Of Crypto Assets And The Industry

After the breach was announced by KuCoin, while the deposit and withdrawal services were suspended, other services offered by KuCoin were not impacted, which include: Spot trading, Margin trading, Futures trading, P2P Fiat trading, Pool-X Staking, Pool-X Liquidity trading network, Kratos voting and governance feature, and the Instant Exchange feature.

In addition to the suspensions of deposits and withdrawals on KuCoin, the hack has led the exchange to declare that its new "Safeguard Program" initiative will be established. Currently there are 27 projects who've joined under the program. The program is dedicated to delivering extensive security and assistance for those impacted by security incidents, individuals and organizations. This includes but is not limited to technical support assistance, processing of evidence, verification of assets and providing advantageous policies.

Both A Blessing And A Curse

The value of providing some certain level of central control in a protocol is still seen in this event. As too much of a good thing is a bad thing in the crypto-verse, let's have a few notable incidents as examples: a decentralized exchange hack caused losses estimated at $12 million dollars last year, leading Chinese DeFi protocol lost 99.95 % of all its funds which is nearly a $25 million hack, and one podcaster lost his entire stash of $113,000 in just twenty minutes after a phishing attack targeting his Bitcoin wallet.

With a little bit of centralized power and surveillance, all three cases could have been easily addressed, as contentious as this perspective may be. Lot of people condemn this notion because it is considered contradictory with the overall cryptocurrency ideology. Even so, many will be probably benefiting through centralized solutions and may need them.

It is primarily on this assumption that the modern financial system is oriented. Centralization entails a censorship risk, but the user will have the sense of security that his needs will be taken care of by an entity. In reality, the complainant will go to court to claim compensation in the event of an incident.

People regard DeFi as the future of finance, but rather to enter broad targets, possible risks should be addressed early on. And presently, some of them should be handled by implementing some degree of centralized control over their protocol:

— Adam Cochran (@AdamScochran) October 2, 2020

Probably, for the time being, it's essential to note that DeFi is novel and out of one's depth. The current system is not that yet set up to shift to a framework that is completely autonomous. The concepts of resilience to censorship, privacy, and total decentralization are generally wonderful, until someone or something is plundered. Maybe it's what it's very much about, development, transforming things until it becomes a whole new, greater stuff.

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Xavier_crypto
Xavier_crypto

I dove into crypto headfirst and spent all my free time consuming everything I could find. I searched every message board, forum, and community until I landed on Publish0x


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