When it comes to cryptocurrency exchanges and trading platforms, safety of funds is always a cause for concern. A new report by CyberNews confirms that there is too much money in hot wallets today, and how user data may be at risk.
Most cryptocurrency exchanges tend to maintain two different wallet types.
Crypto Hot Wallets Contain Too Much Funds
They store the majority of user funds in cold wallets.
Such a security step is necessary, as criminals will continually try to attack these platforms and steal funds.
The remainder of the money is kept in so-called hot wallets, allowing for quick withdrawals when users request them.
It now appears that there is still too much funds in these hot wallets, according to CyberNews.
They claim how roughly $18 million is kept in hot wallets, which are potentially exposed to intrusion and theft.
Making matters worse is how some companies apparently expose private keys and RPC keys of the hot wallets, which is not a good sign.
This primarily seems to affect smaller exchanges and trading platforms.
Some companies, on the other hard, do not encrypt KYC data on their servers, or suffer from API access that can be exploited sooner or later.
A very worrisome turn of events that needs to be addressed as quickly as possible.