With the inception of cryptocurrencies, fraudulent practices in the crypto space emerged as well. As all cryptocurrencies are digital programmed assets, different techniques are used by hackers to steal as many funds as possible. Recently, hackers with their advance methodologies hacked the cell phone of CTO Algo Capital, Pablo Yabo, and looted cryptocurrency of several million worths.
It was revealed that Tether having about $1–2 million worth was stolen. Apart from Tether, the crypto exchange also lost ALGO tokens. According to the CEO of Algo Capital, David Garcia, following the security compromise, hackers were able to seize control of the Algo hot wallet that was operated by Yabo. After getting hands-on the wallet, a few million worth cryptocurrency was looted by bad actors.
Furthermore, the CEO also told that an email regarding the incident was circulated to the Algo Capital VC Fund Limited Partners. Besides, the CTO, not sharing thoughts on the matter, has stepped down from his position and resigned from the firm.
The security team of Algo Capital has taken notice of the breach and several security measures have been taken. The firm also enlightened that as most funds were stored in the cold storage, they weren’t compromised at all. Funds only in the wallet administered by Yabo were targeted successfully by the bad actors.
At the moment, the CEO of the firm has confirmed the breach and taken full responsibility for the loss. Garcia has announced compensation for all the losses within the next 20 months. Tightening the security from now onwards and seeking a solution for similar fraudulent activities in the space, the CEO said:
We are engaging with certain key organizations and security services to collaborate and address this issue which has become a common industry problem.
ALGO token is the world’s 54th biggest cryptocurrency by market cap. As most tokens were stored in offline cold storage, the firm managed to prevent hackers from accessing it. Although a cold storage wallet is a viable solution against hacking, it is not availed by several cryptocurrency exchanges.
Oppose to cold storage, hot storage wallet is a wallet where cryptocurrencies are kept online. As online cryptocurrencies are prone to cyber hacks, it is preferable to keep crypto funds safe in cold storage wallets.
Crypto hacks and scams have become very common in the crypto space as every now and then a crypto exchange or user is looted the bad actors. According to an estimate, bitcoin looted by bad actors in the space is way more than possessed by bitcoin’s creator Satoshi Nakamoto.
To investigate the effects of illicit and fraudulent practices of bad actors on the cryptocurrencies, BlockPublisher reached out to the BX3 Capital founding partner, Kyle Asman. Upon enquiring how hacks, scams, frauds, and malware were ruining the repute of bitcoin and other cryptocurrencies, Asman responded:
Bad actors have caused a ton of issues in the digital asset space. A lot of fraud that has occurred, as well as a significant amount of hacks, which have forced people to question the safety of Bitcoin and other cryptocurrencies.
As bad actors are continuously engaging in fraudulent practices, the repute of cryptos is on the stake. To gain the trust of crypto users and investors, issues such as cyber hacks and security breaches must be dealt as soon ass possible.