How Secure Is Cryptocurrency?Robert Schwentker Reviews Challenges Bitcoin Exchanges Face in Wake of Hacks
In the wake of the recent hack of the Bitfinex bitcoin exchange in Hong Kong, the Ethereum hack earlier this year and the Mt. Gox hack in 2014, the stability and security of cryptocurrency is being questioned. Cryptocurrency expert Robert Schwentker says these attacks could raise questions about whether regulatory oversight of bitcoin exchanges is needed.
"The hack of the Bitfinex exchange in Hong Kong, which resulted in approximately 120,000 bitcoins being stolen ... was not, again, a hack of bitcoin protocol itself," Schwentker says in this video interview with Information Security Media Group. "It's similar to the Mt. Gox hack, where an exchange got hacked. Certain security protocols apparently might not have been followed, and the practices that they set up were not followed. Therefore, there's been this loss of people's funds. Whether the exchange will make those people who had put their bitcoins on their exchange whole again or not, we'll have to see."
In this interview at ISMG's recent New York Fraud and Breach Prevention Summit, Schwentker also discusses:
- How steps to reduce risks in the wake of a bitcoin exchange breach have created new problems;
- Why the so-called "hard-fork" of the Ethereum exchange could result in litigation; and
- Other security challenges bitcoin exchanges could face.
Schwentker is co-founder and president of Blockchain University, a project developed to provide education about blockchain technologies to developers, builders and startups in Silicon Valley. Previously, Schwentker held software development positions with PayPal, American Express, Mechanics Bank and others.