Moving digital currency can be something of a hassle. There are elements out there, like exchange hacks and cybercriminals that can prevent coins from transferring from one exchange or account to another, which is where a company like Fire Blocks comes in.
Hacks and Thefts Are Too Common
Fire Blocks is an institution that seeks to stop hackers from gaining control of digital coins when they’re being moved between accounts. The idea is to keep all assets safe and secure during transfers, and the company has now earned more than $16 million in initial funding to do just that.
CEO and co-founder Michael Shaulov explained:
While blockchain-based assets by themselves are cryptographically secure, moving digital assets is a nightmare. After interviewing over 100 institutional customers, including hedge funds, broker-dealers, exchanges and banks, we conclude that the current process is slow and highly susceptible to cyberattacks and human errors. We built a platform that secures the process and simplifies the movement of funds into one or two steps.
Among the company’s primary investors are the cybersecurity venture firm Cyber Starts; Tenaya Capital in Woodside, California; Swisscom Ventures; M State in New York, and Eight Roads of Fidelity International. Among the company’s biggest clients include Galaxy Digital and Genesis Global Trading. Both ventures are large, “institutional digital asset-trading operators” that seek to move cryptocurrencies between exchanges.
At press time, Fire Block offers support for more than 180 different digital tokens and is integrated into roughly 15 separate crypto trading platforms. The company claims that approximately $3 billion in crypto assets have been stolen by hackers within the last year-and-a-half, and that 2019 is looking to put 2018’s record theft numbers in the “small figures” category.
Among the most recent thefts to take place in the crypto space include a $40 million bitcoin hack that occurred on Binance’s servers. Binance is arguably the largest cryptocurrency exchange in existence, and while bitcoin ultimately went up in price following the hack and the company had enough reserves to replace the lost funds, executives claimed the hack “still hurt.”
Thefts Hurt the Whole Industry
Despite all the security and regulatory tactics that have made their way into the crypto space over the past few years, instances like these are still far too common. One of the big problems with hacks and thefts like these is that while they personally affect cryptocurrency exchanges and their customers, they also diminish the legitimacy of the digital asset space.
Many argue that cryptocurrencies still aren’t safe enough to invest in given their vulnerability to outside market influence and cybercriminals. When instances like these occur, they can cause a serious dent in the overall reputation that cryptocurrencies have been enjoying as of late, and they work to reiterate the fears that many investors have.