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Hack losses sees new crypto exchange Altsbit shut it’s doors in May 2020

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Hackers have been on the rise these past few years.  A report from blockchain analysis platform Chainalysis states that 2019 saw more than 11 major hacks and the hackers managed to steal more than $283 million in cryptocurrency assets. The previous year saw $875.5 million stolen from just six hacks.

Altsbit forced to shutdown

2020 began with the catastrophic hack of an Italian crypto exchange Altsbit. The platform announced on 6th February, that its hot wallet had been breached. Nearly all of its BTC, ETH, ARRR, and VRSC holdings were reported to have been stolen. What’s surprising is the fact that the exchange had been active for just five months after a major rebranding.

The exchange later released a statement claiming that 6.929 Bitcoin (BTC) and 23 Ether (ETH) had been lost in the hack, alongside losses in other cryptocurrencies such as Pirate Chain (ARRR), VerusCoin (VRSC) and Komodo (KMD).

As a result of the hack, Altsbit has announced that the exchange would shut down all services on May 8, 2020. The platform has a major amount of funds stored in their cold wallets, but despite this, the company has decided to quit. Victims of the hack have been promised complete refunds using the funds from the cold storage. The announcement reads:

“Refunds will begin on February 10, 2020, and end on May 8, 2020, after this date it will no longer be possible to request a refund as the Altsbit platform will be terminated.”

The exchange has lost a significant amount of funds considering that it’s a small exchange. At press time, the overall amount of verified losses in Bitcoin and Ether account for around $70,000.

An Altsbit spokesperson confirmed the news to crypto media outlet Cointelegraph that the company’s decision to shut down services is final, noting that the exchange will partly reimburse its customers, stating:

“We will refund whatever we are holding on cold storage to users and then the platform will close down.”

Centralized exchanges are at risk

As reported earlier by The Daily Chain, Centralized exchanges are not the best of places to store crypto assets. Events like this alongside many others are perfect examples of that. Anyone storing their assets in a centralized exchange is putting their faith in the organization. Even the smallest of bugs or errors on the part of the exchanges could lead to an unrecoverable damage.

Decentralized exchanges have some basic advantages like enhanced Privacy due to no registration requirements or KYC process, no deposit or withdrawal is required, and all the transactions are handled by secure smart contracts, and most importantly, no single point of failure, control or regulation.

It is however expected that proper regulations in this space could help reduce issues like these.

Anna Larsen
Anna Larsen has been a Crypto enthusiast since 2016. Fascinated by the technology and its usecases she decided to pursue a career in content creation related to this space. The journey has been exciting ever since.

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