According to Gizmodo*, FTX, the once beloved crypto exchange that went down in a ball of financially flames last November, appears to have spent very little effort protecting its customers’ vast reserves of digital assets.
The company’s latest bankruptcy report reveals that, in addition to managing its finances like a Jim-Beam-swigging monkey, the disgraced crypto exchange also had some of the worst cybersecurity practices imaginable. Of course, we’ve known that FTX sucked at cyber since at least last November when, less than 24 hours after the company declared Chapter 11 bankruptcy and its former CEO, Sam Bankman-Fried, aka SBF stepped down, the company suffered a massive digital robbery. The robber, whoever they were, made off with $432 million in assets, a bundle of digital cash that is still unaccounted for—just like a whole lot more of FTX customers’ money.
If we can expect to learn anything from the story of FTX is that other companies will continue to break the crypto market. However, they will need to reflect on the absolute lack of security the platform represented to make sure they do not repeat the same mistake. The downfall was directly affected by its own cybersecurity and therefore onlooking platforms need to review and analyse the demise in defences to future proof any sort of protection. Although crypto start ups have taken a few punches over the last 12 months after their initial explosion, this is not to suggest that they won’t be back with a vengeance. But one thing is clear that they will need to be secure by design to make investors part with their cash.
Every growth firm comes with “growing-pains” and most of the times profit and expanding business seems more important than security. This can ultimately backfire rather sooner than later.
*ESET does not bear any responsibility for the accuracy of this information.
ESET Ireland 