Youth Incorporated Magazine

The invention of cryptocurrencies brought quite a storm in the world of finance and investment. Little did anyone know that the same cryptocurrencies in which almost every other person wanted to invest would also be vulnerable to hacking and theft. Over the past few years, the rise in the number of hacking cases in the crypto world is making people sceptical. To add to this scepticism, another incident of theft has made it into the news. Nomad, a US crypto firm fell victim to hacking where cryptocurrencies worth $190 million were stolen by hackers.

On Aug 1, 2022 the firm tweeted, “We are aware of the incident involving the Nomad token bridge. We are currently investigating and will provide updates when we have them.”

In its follow-up tweet on August 2, Nomad said, “we are working with leading chain analysis and intelligence firms as well as law enforcement to trace and try to recover the stolen funds.” The company also assured its investors of developing technical fixes and an action plan, to prevent such thefts in the future.

Nomad is a firm that develops software which is used to connect different blockchains such as Ethereum and Bitcoin. This software helps investors in swapping their digital assets, or tokens, safely across different multiple blockchains without taking any assistance from any unauthorised third party. 

While crypto theft continues to plague the world of digital currencies, hackers have now begun attacking the blockchain bridges like Nomad instead of directly hacking the crypto exchanges. Further, this isn’t the first time that a blockchain bridge has been attacked by hackers. Previously, in June, Harmony, another U.S. crypto firm also revealed that hackers stole around $100 million worth of tokens from its Horizon bridge product. In another stealing incident, hackers stole around $615 million worth of cryptocurrency from Ronin Bridge in March.

The rampant occurrence of such thefts has brought to the surface the risk involved in investing in digital currencies.  Talking about the same, Erich Kron, security awareness advocate of KnowBe4 said, “While we have had thousands of years to learn how to secure physical assets and money, the practices of securing digital currency, especially cryptocurrency, are still in their infancy.” He also went on to say, “Unlike physical assets, attacks against digital goods and money can be done from anywhere in the world, and unlike when a person is arrested for attempting to steal physical goods, attempts to steal digital items are accepted as normal, and rarely is an arrest made.”

While there is no defined and guaranteed way to prevent and stay safe from such thefts, one can always practice mindful investing. Understanding the threats involved in investing, and how online hacking, phishing, vishing, and smishing work, staying educated about these threats is vital to investors as well as organisations involved in cryptocurrencies.