The cryptocurrency landscape is becoming increasingly treacherous, particularly for centralized exchanges, which have become prime targets for sophisticated cyberattacks. One of the most pressing threats is social engineering, a tactic that exploits human vulnerabilities rather than technical flaws.

Centralized exchanges, by virtue of their large size and extensive workforce, are particularly susceptible to such attacks. With more employees, there are more potential entry points for attackers, making it easier for malicious actors to deceive or manipulate staff into granting unauthorized access to critical systems.

Chainalysis reports that criminals have managed to steal around $1.5 billion worth of crypto assets year-to-date. Interestingly, however, decentralised platforms seem to be becoming less vulnerable than in the past, whilst centralised services such as exchanges have become the new targets for many of these thieves.

Value lost by victim type

Social engineering attacks – particularly the infiltration of these entities’ IT workforces by hackers linked to North Korea – appear to be an attack vector growing in popularity.

The implications of these social engineering attacks can be devastating, leading to significant breaches that compromise vast amounts of user funds and sensitive information. The sheer scale of these exchanges makes it challenging to maintain consistent security practices across all employees, thereby increasing the risk of successful attacks.

In contrast, Jaltech’s approach to cryptocurrency custody combines several different layers of protection to offer clients a more secure alternative to cryptocurrency exchanges for their long-term holdings. These include the thorough vetting of any withdrawal instruction as well as requiring approvals from independent third parties for large withdrawals.

A licensed crypto asset service provider

Jaltech is a licensed crypto asset service provider (CASP), under the oversight of the Financial Sector Conduct Authority (FSCA). Jaltech operates with a small, highly skilled team of cryptocurrency experts, ensuring a focused and cohesive security strategy. This tight-knit team can implement rigorous security protocols and maintain a high level of vigilance, significantly reducing the likelihood of a successful social engineering attack.

Furthermore, Jaltech leverages Fireblocks, the gold standard in private key management, to provide an added layer of security and eliminate single points of failure within the custody setup. Fireblocks is renowned for its advanced technology in safeguarding digital assets, offering institutional-grade protection against both internal and external threats.

As the threat landscape continues to evolve, it is crucial for cryptocurrency investors to prioritize security. Jaltech’s combination of a skilled team and the use of Fireblocks for private key management offers a robust defence against the vulnerabilities that have plagued larger centralized exchanges. For investors seeking peace of mind in an increasingly risky environment, Jaltech provides a trusted and secure solution.Jaltech’s team is on hand to assist with the transfer of cryptocurrencies currently held on centralised exchanges into their custody solution, which offers competitive fees for the long-term storage of crypto assets. If you’d like to learn more, fill in the form found here and a representative will be in touch.