Panic Attack: How Ledger Earns on Crypto-Exchange Hacks
Hackings of cryptocurrency exchanges may not only do harm to market participants, but also vice versa - bring them some extra benefits. At least that’s what happened to Ledger, the company which sales jumped sharply as a result of the hacking attack on Binance.
Stolen 7000 BTC
Crypto exchange Binance is one of the most successful projects in the crypto sphere. But its popularity was helpless when on May 8, the platform suffered from a hacker attack.
The result of the attack, was leaving the exchange without 7000 BTC (about $ 42 million at that time - ed.). The purpose of the hackers was a hot BTC-wallet, containing about 2% of the funds, that belonged to the clients of the platform.
The news unnerved the whole crypto community. Most people, however, came to the conclusion that the damage was not big enough for the exchange to experience any difficulties. Later on that turned out to be exactly the case.
Thus as soon as on May 15, the site resumed its full-fledged work, and the head of the company Changpen Zhao said that Binance would have enough of its own funds to cover the damage. At the same time, he even refused the help of the head of TRON, Justin San, who actively offered to compensate for the stolen bitcoins.
How to make money on the exchange hacking
It would seem that the incident was over. The exchange learned the lesson and promised to strengthen its safety. Investors, however, had a different opinion on that. In pursuit of security, cryptocurrency owners rushed to buy hardware wallets, while remembering that the main “star” in this market is the French company Ledger. It drew most of attention of Binance’s frightened customers.
“Binance has undergone a hacker attack, and the same day our sales have doubled,” boasted Pascal Gautier, Ledger’s CEO.
He also decided to add some fuel to the fire, emphasising that as for today the security level of cryptocurrency assets is insufficient. And the attack on Binance is a proof of that point of view.
It is worth noting that exactly on May 15, when Binance returned to service, the French company released its new mass product - Ledger Nano X. The release of the wallet was delayed for a long time, but in the end everything worked out well for Ledger.
Ledger - not a panacea
Indeed, Ledger is safer than hot storage, but it’s still not an ultimate anti-burglary solution with 100% of success - believes Vitaly Yakushev, an operational director of 10Guards.
“Even using Ledger, you need to be as vigilant as possible and conduct transactions on trusted devices with security software installed. You also need to update Ledger firmware and all the rest of the software on your device (smartphone, PC, laptop) and be sure to double-check the details of each transaction you perform ” the expert explains.
In any case, if you use third-party software to store your private keys, you trust the security of those companies and depend on the competence of their specialists.
Therefore, it does not matter whether it is a crypto exchange or a hardware wallet, there is always a risk of losing your funds. After all, a person is the weakest link in assets security.
Author: Evgeny Komchuk