The cryptocurrency market has gone through regular bull cycles, but industry experts caution about the security risks that often come with this growth.
Ian Rogers, chief experience officer of Ledger, spoke with Cointelegraph in a Token2049 interview about these risks, highlighting how market booms risk relaxation of security practices.
“Every single bull cycle, you have people that have some seemingly rational reason to compromise on security, self-custody or both.”
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Rapid expansion risks and centralized exchanges
Rogers discussed the periods of expansion that rapidly follow the bull cycles, explaining that many crypto holders opt to store their assets on centralized exchanges rather than self-custody them.
“If not self-custody, why crypto?”
The Ledger exec raised concern about the risks of centralized exchange reliance, specifically during downturns, referencing the collapse of the now-defunct crypto exchange FTX.
“What they were doing was giving their money to someone in the Bahamas who was putting a column in a spreadsheet. That’s not called crypto. That’s called fraud.”
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Growing digital age cybersecurity risks
Beyond the scope of cryptocurrencies, Rogers pointed out the broader trend that is appearing as cybercrime occurrence increases globally, arguing that the frequency and complexity of digital attacks will increase.
“You’ll be able to say this year was the worst year for cybercrime every year for the rest of your life and be accurate.”
To mitigate and combat this growing threat, Rogers advocates for secure self-custody of digital assets through hardware solutions and clear-signing technology to ensure users are fully aware of what transaction they are authorizing.
Related: Ledger CEO explains what makes a wallet secure as Ledger Flex launches
Ledger reimbursement of exploit victims
On Dec. 20, 2023, Ledger announced that it was aware of $600,000 in assets impacted or stolen from users via a blind-signing exploit on Ethereum Virtual Machine decentralized applications (DApps).
Multiple DApps, including SushiSwap and Revoke.cash, were compromised on Dec. 14, 2023, resulting in massive fund losses for investors.
In Ledger’s announcement, the firm stated that victims would be made whole and repaid, assuring it committed to achieving this “by the end of February 2024.”
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