A Tale Of Two Exchanges

On 29 Feb 2020, Coinhako sent the above email to account holders informing them that it has resumed 100% of its services for account holders after some restrictions were imposed due to a hacking attempt on 21 Feb 2020.

Between 21 - 29 Feb, Coinhako implemented the below measures:

• Promptly initiate 100% refunds for the less than 20 accounts that were hacked

• Impose mandatory password and 2FA resets for all account holders

• Resume 'send' function for BTC, ETH and BCH on 28 Feb

• Resume 'send' function for all listed cryptos on 29 Feb

The above scenario is in stark contrast to what happened after cryptoexchange Altsbit announced that it was hacked on 5 Feb 2020.

For Altsbit, events unfolded in the following manner:

• Announcement on Twitter that hackers stole almost all of the account holders' BTC, ETH and other cryptos

• Partial refund offer given to affected customers

• Notified customers that refunds will take place from 10 Feb to 8 May, after which Altsbit will cease to operate.

From the vastly different denouements of Coinhako and Altsbit, after falling prey to hackers, one can draw the following conclusion:

One key factor contributed to the different outcomes stated above- investment in a sophisticated fraud detection system.

Had Altsbit dedicated its resources towards the implementation of robust fraud detection capabilities, it would not have been brought to its knees.