Media In Meltdown Over Binance Incident - Clickbait Hype, Fear Tactics, and The Truth...

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Like clockwork, the usual suspects have published their sensationalized stories about this week's security breach at Binance.  Back with the same recycled, predictable, click-bait we've become accustomed to.  So predictable, that late last night I tweeted in anticipation of these articles coming, and woke up today proven right.

The summary of these stories go something like "TOLD YOU SO! Cryptocurrency is scary money made by hackers and used by criminals - so it shouldn't be a surprise when you hear $40 million was stolen from a cryptocurrency exchange." 

They all claim repeatedly that cryptocurrency is an abnormally 'high priority target' for criminals to steal, and thus higher risk for the average person to own.

Unfortunately, substantiating that claim involves a lot of picking choosing, so much so that anyone claiming it is either willfully manipulating their readers and choosing clicks over accuracy, or legitimately ignorant and completely unqualified to be reporting on the topic at all.  I'm not trying to be mean here, but I can't even 'play devil's advocate' and think of an innocent reason to be so wrong.

For example, VOX's article, which is probably the worst of the worst. Writer Emily Stewart seems to think cryptocurrency is some pretty scary stuff, and tries to explain why you should be scared of it too.

The headline "If bitcoin is so safe, why does it keep getting hacked?" first had me thinking - perhaps the article itself would explain that Bitcoin has never been hacked, that the encryption it uses has proven to be unbreakable, and even the world's top spy agencies would feel comfortable transmitting messages using it.

Of course, I was wrong. The article continues with "...for a technology that’s supposed to be hyper secure, in practice, it’s often proven itself to be, well, not" and there's even a section titled "What makes bitcoin exchanges so hackable?".

It quickly becomes crystal clear that the author has no hands-on experience with anything cryptocurrency related, and seems to think people literally hand over their private keys to an exchange.

She even warns about the risk of giving your private key to a wallet. (What?!)


My source on this isn't some conspiracy theory filled blog - both global intelligence firm IDC, and multi-billion dollar global advisory firm Gartner conducted studies that came to the same conclusion - approximately 80% of cyber-security breaches go unreported in the banking industry.

Their reason - it could lead to loss of confidence from both customers and investors.  The studies say it's not just the public they hide it from, but in order to be sure the story never gets out, that means hiding incidents from law enforcement as well.

Here we actually see another advantage of cryptocurrency - can't cover up funds moving on a public ledger! Companies in the cryptocurrency space never get the option, and have to tell their clients.


Remember that figure of 80% of incidents being covered up - the remaining 20% we know about makes it clear - cyber-criminals target any institution with a lot of money, and an internet connection.

The cases we do know about include malware being put onto the massive nation-wide ATM STAR Network, which somehow criminals were able to exploit twice in an 8 month period.

Networking giant Oracle experienced a breach after acquiring Micros, a POS credit card processing system used by Hilton Hotels, Adidas, Burger King to name a few - Oracle discovered malware had been 'slipped in' to the system.

Uber recently paid out $148 million to settle claims after personal information of over 50 million users were stolen, covered-up, exposed, and they were sued for it.

Even the Federal Reserve, the official reps for Fiat currency, were hacked 50+ times in a 5 year period!

Just a few examples out of hundreds, if we really only hear about it 20% of the time - you could even make the case that cryptocurrency exchanges are actually a low priority target.


It's important people understand - just because you read the word 'hacked' doesn't mean that's what happened.

In fact, the cryptocurrency industry is full of digital security experts, and exchanges are known for putting a lot of time, effort, and funding into security. More often then not, when we learn the details of how a 'security breach' was pulled off  - it usually involves no actual hacking whatsoever.

Instead, they use old tricks, such as fooling an employee into opening an e-mail that appears to be from their boss, but it isn't - it actually installs a backdoor into the system, or captures passwords as they're typed and sends them to the criminals.

These tricks can be pulled off by someone with fairly average computer skills, actual hackers call them 'script kiddies' because all they do is use malicious code somebody else made, like actors following a script. These unsophisticated methods are typically the root cause of breaches today.


When it comes to cyber-crime, criminals do not "prefer cryptocurrency" - they just "include cryptocurrency" among the type of funds they're willing to go after.

It doesn't make for an exciting headline - but it really is just that simple.

Author: Ross Davis
E-Mail: Twitter:@RossFM

San Francisco News Desk

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