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Cryptocurrency expert calls for better protection

An Isle of Man-based cryptocurrency security expert is calling for action after another hacking scandal saw 32m dollars stolen from an exchange.

Japan-based Bitpoint, which allows users to buy currencies including Bitcoin, was reportedly forced to halt trading after irregular activity was spotted earlier this month.

It is not the first time crypto exchange users have lost their money, with Binance being targeted by hackers earlier this year and QuadrigaCX collapsing after the death of its chief executive meant no one was able to access the stored funds.

(Binance is a global cryptocurrency exchange that provides a platform for trading more than 100 cryptocurrencies.)

Justin Short, co-founder of MetaVault – a fully insured ’digital asset custodian’, based in Douglas – said crypto users deserve better protection.

He said: ’This kind of event simply should not be happening at this stage of the industry’s development and exchanges have too much to gain from continuing to bend the rules.

’This kind of news embarrasses professionals in this industry and delays mainstream adoption and utility.

’Exchanges don’t make their money from storing tokens, their interest is in customers trading them so, sometimes, the security of the tokens they hold is not a top priority.’

Mr Short believes further controversies are avoidable – and crypto users have a role to play in affecting change.

He said: ’The good news is that this problem is, right now, completely solvable.

’However, customers need to start loudly demanding solutions by voting with their wallets. Exchanges should strongly consider using independent cold storage solutions that are fully insured.

’Not only does this almost completely eradicate the risk of tokens going missing but also, in the unlikely event that it does happen, it means customers are guaranteed to get their funds back – unlike with so-called ’’self-insured’’ solutions.

’If crypto is to become truly mainstream, then controversies involving millions of dollars vanishing clearly need to stop.

’It’s time for the industry to get serious.’

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