By Yu Xian, Founder of SlowMist
The crypto world has recently witnessed a surge in security breaches, from IOTA’s mainnet halt to bZx’s double exploit and high-profile SIM swap hacks. What’s behind these incidents, and how can you safeguard your digital assets? SlowMist founder Yu Xian breaks down the critical lessons and proactive measures.
1. Recent Security Incidents: Key Vulnerabilities Exposed
1.1 IOTA’s Mainnet Shutdown
- What Happened? IOTA’s official wallet integrated a third-party trading module, which was compromised, leading to stolen private keys and passwords. Losses totaled 8.55 million IOTA (~$2.3M).
- Root Cause: The wallet’s JavaScript framework allowed malicious code injection via the compromised third-party component.
1.2 bZx’s DeFi Exploits (Twice!)
- Issue: Flaws in its economic model and risk controls enabled attackers to manipulate liquidity pools.
- Lesson: Even "decentralized" projects need robust systemic safeguards.
1.3 SIM Swap Attacks (e.g., Josh Jones)
- How? Hackers cloned victims’ SIM cards to bypass SMS-based 2FA, draining exchange accounts.
- Solution: Use Google Authenticator or hardware-based 2FA instead of SMS.
2. Protecting Your Private Keys: Best Practices
2.1 The Three Pillars of Key Security
- Generation: Use trusted, offline tools (e.g., hardware wallets).
- Storage: Split keys via Shamir’s Secret Sharing (SSSS) or multi-sig.
- Usage: Isolate transaction-signing devices from internet-connected devices.
2.2 Multi-Signature (Multi-Sig) Wallets
- BTC: Native multi-sig is more trusted than smart-contract-based solutions (e.g., Ethereum’s).
- Caution: Audited contracts can still have vulnerabilities.
3. How to Evaluate a Project’s Security
3.1 Five Critical Indicators
- In-House Security Team: Core members with proven expertise.
- Third-Party Audits: Public reports from reputable firms (e.g., SlowMist, Trail of Bits).
- Ongoing Partnerships: Long-term collaboration with security auditors.
- Transparency: Open communication about past incidents.
- Culture of Security: Team-wide prioritization of safety over hype.
4. Choosing a Secure Hardware Wallet
4.1 13 Must-Have Features
- Multi-Currency Support (BTC, ETH, etc.).
- Top-Tier Hardware Modules (e.g., secure elements from Infineon).
- Air-Gapped Signing (no Bluetooth/USB vulnerabilities).
- On-Device Screen for address verification.
- Open-Source Firmware (gradually released).
- Physical Durability (water/fire resistance).
- Multi-Sig Compatibility.
👉 Explore trusted hardware wallets for asset security.
FAQ: Quick Crypto Security Tips
Q1: Is SMS 2FA safe?
A: No. Use Google Authenticator or a hardware key (e.g., YubiKey).
Q2: How do I recover stolen crypto?
A: Chain analysis (e.g., SlowMist’s tracking tools) can help, but recovery rates are low.
Q3: Are hardware wallets foolproof?
A: No—ensure firmware updates are signed and verify addresses on-screen.
Q4: What’s the biggest threat to exchanges?
A: Internal mismanagement (e.g., leaked keys) and phishing attacks.
Final Thoughts
Crypto security demands constant vigilance. From private-key hygiene to project due diligence, every layer matters. Stay informed, use hardware wallets, and question "too-good-to-be-true" schemes.
👉 Dive deeper into crypto security with our advanced guides.
Adapted from an original article on ChainNews, republished with permission.