Cryptocurrency Exchange DragonEx Suffers Security Breach

Those who are familiar with cryptocurrencies, understand how bad this is. For those who aren’t, here is a brief overview.

Unlike traditional forms of currency, cryptocurrency is not tangible, is not protected by the FDIC, and in reality, is only as secure as where it is stored. This means, if the storage is compromised, so is the cryptocurrency. Therefore, those who have invested in cryptocurrency must understand the best, and worst, places to store these funds. 

Some of the best places to store cryptocurrency would be on an external storage device, or possibly a digital wallet. One of the worst places would be a digital exchange center. This is not because exchange centers lack security, but because they are often targeted by hackers.

The DragonEx Breach

This is exactly what happened to the digital exchange center, DragonEx.  Earlier this week, the exchange platform was targeted by cyber criminals, who effectively breached the network.  Once in the network, hackers transferred and stole an undisclosed number of cryptocurrencies.  The digital assets belonged to not only DragonEx, but also its users. 

Fortunately, some of these assets were able to be retrieved; however, there are still an undisclosed number of digital currencies missing.  For those users who have lost their cryptocurrencies, there is little they can do.  This is exactly why exchange platforms are not a wise place to store digital currencies. 

Weighing The Options

It is recommended, anyone who has invested in cryptocurrencies reevaluate their storage methods of these funds. 

Options for digital fund storage include digital wallets, paper wallets, or external storage devices.  However, all of these come with their own risks.  For example, digital wallet platforms may too be targeted by cyber criminals and external storage devices run the risks of malware corruption or physical destruction. 

Regardless of which storage service or device used, there are risks. It just depends on how much risk the investor is willing to accept. 

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