Written by: Aaliyah Ahmed, The Times
Translated by: Chopper, Foresight News
Binance suffered a hacking incident last week, and the world's largest cryptocurrency exchange has encountered issues, causing investors to worry about the future of their crypto assets.
Invested £5,000 in XRP, I regret it
33-year-old Max Daniels works in the communications industry and is struggling with whether to cut his losses in time. He invested a total of £5,000 in cryptocurrency, and the recent hacking attack on the world's largest exchange, Binance, has heightened his concerns.
Last summer, seeing friends and family making considerable profits in the crypto market, Daniels bought XRP through Coinbase. When the price of XRP was around £1.6, he invested £4,000; later, as the price continued to rise, he added another £1,000. Now, his holdings are worth less than £3,000, and feelings of regret keep surfacing.
Having just moved into a new house, Daniels said he and his wife plan to sell everything once the price of their crypto assets recovers and their losses do not seem so glaring. "We don’t expect to break even, much less make money. We just hope the losses don’t look as bad as they do now," he said.
The Binance hacking incident is regarded as one of the largest financial thefts in history, with hackers stealing assets worth $6.3 billion from the exchange's cryptocurrency wallets.
Binance stated that the hack originated from human error: an engineer accidentally downloaded malware in June; subsequently, hackers spoofed interviews to deceive another employee into installing malicious software. Of the $6.34 billion stolen, $2.85 billion has already been frozen and intercepted by the platform. The FBI has attributed the attack to a North Korean hacking group.
Although Daniels did not keep his funds on the Binance platform, this security incident made him begin to question just how secure cryptocurrency really is. "After all, this is digital asset, everything relies on the digital world to exist and could also be destroyed in the digital world. Once a hacking incident occurs, in the long term, the entire market will be affected."
After this incident, he began to monitor his investments more closely, adjusting the price alerts on his Coinbase account, and once the price reaches his psychological expectations, he is ready to sell and exit with his wife.
Daniels regularly interacts with clients in the crypto industry at work, so he is well aware of the various risks such as "bad actors" and market manipulation. However, the allure of high returns, combined with the external market atmosphere, still drove him to take the plunge.
He allocated 60% of an inheritance to an S&P 500 index fund, 30% to XRP, and the remaining for everyday expenses. The returns from the index fund roughly offset his losses in cryptocurrency. "I'm not someone who likes to engage in high-risk speculation. Honestly, index funds always appreciate in the long run."
"I have lost faith in cryptocurrency trading platforms"
35-year-old Tom Stanley is an IT director in West Yorkshire, and he has invested about £20,000 in Bitcoin, Ethereum, and Dogecoin.
The hacking of Binance has made him start to worry about whether the trading platform that holds his assets is secure enough. He has been investing in cryptocurrency for ten years and mainly uses Coinbase. Although there have been no abnormalities in his account, he has begun to diversify part of his assets across multiple trading platforms to mitigate risk.
He is concerned that hackers can bypass standard security measures like SMS verification, facial recognition, and voiceprint identification. Since the Binance incident, he has increased the frequency of checking his accounts but has not completely abandoned cryptocurrency as a whole.
In his view, the issue exposed is a flaw in the custody and trading platforms, not the underlying technology of cryptocurrency itself. "I have lost faith in these platforms, not in blockchain technology."
Coinbase responded: The ownership of assets on the platform always belongs to the user and will not be lent or used without permission. The vast majority of assets are stored in secure offline cold wallets, along with multiple layers of protection, including access control for system permissions and various tools to help users keep their accounts secure.
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