The amount stolen from cryptocurrency exchanges continues to increase sharply, last week surpassing an all-time total of $1.3 billion, according to The Block’s research.
The ecosystem’s largest weakness are the centralized institutions that hold users’ private keys. As the price of cryptocurrencies grew, large wallets controlled by exchanges became a honeypot for hackers. All reputable companies now keep the majority of their funds in cold storage. Only about 2% of the exchanges’ total cryptocurrency holdings is generally kept in hot wallets.