North Korean hackers, like the notorious Lazarus Group, might start going after bigger financial institutions, including Bitcoin ETFs based in the U.S.
North Korean Hackers are Now Eyeing Bitcoin ETFs as Their Next Big Target
The Lazarus Group, known for some of the biggest hacks in the crypto world, including the $625 million Ronin bridge hack, might start focusing on U.S. Bitcoin ETFs. Michael Pearl, VP of strategy at Cyvers, believes hackers are attracted to the large payouts these ETFs could offer.
Pearl told Cointelegraph in an exclusive interview:
“Only recently the FBI has issued a warning that North Korean hackers are going to try to infiltrate and steal money from ETFs. So, all those ETFs […] are storing the base Bitcoin somewhere. And you can be certain that somebody is already planning and thinking of how they’re going to steal it.”
Bitcoin ETF vulnerabilities could invite more stringent crypto regulation
Weaknesses in Bitcoin ETFs could lead to stricter regulations on cryptocurrency. If vulnerabilities are exploited, it might push regulators to impose tighter controls to protect investors and prevent future issues.
North Korean hackers going after the systems around Bitcoin ETFs pose serious risks and challenges for the industry. The crypto world is still bouncing back from the $230 million WazirX hack in July, which was the second-largest hack in 2024 so far.
Bitcoin ETF vulnerabilities refer to potential security risks or weaknesses in Bitcoin exchange-traded funds. These could include hacking threats, market manipulation, or issues with how the Bitcoin backing the ETF is stored or managed. If these vulnerabilities are exploited, it could harm investors or disrupt the market, which is why they are a concern for regulators and the crypto industry.
How can we overcome Bitcoin ETF Vulnerabilities?
Overcoming Bitcoin ETF vulnerabilities requires a combination of strong security measures and regulatory oversight. Here are a few steps that can help:
1. Enhanced Security Protocols: Bitcoin ETFs should implement top-tier security measures like cold storage (offline storage) for their Bitcoin holdings to minimize the risk of hacking.
2. Regular Audits: Conducting regular third-party audits of Bitcoin reserves and ETF management can ensure transparency and trust, making it harder for vulnerabilities to be exploited.
3. Insurance: ETFs can purchase insurance to cover losses from hacks or other malicious attacks, offering extra protection to investors.
4. Improved Regulations: Governments and regulatory bodies could introduce more stringent guidelines for Bitcoin ETFs to ensure they follow best practices for security and management.
5. Education for Investors: Providing clear information to investors about the risks and rewards of Bitcoin ETFs can also help reduce vulnerabilities, as investors will be better equipped to make informed decisions.
By combining these strategies, the risks associated with Bitcoin ETFs can be significantly reduced.
Will the Bitcoin ETF get hacked?
While it’s impossible to say for sure whether a Bitcoin ETF will get hacked, it is a possibility, just like with any financial product that involves digital assets. Bitcoin ETFs, like other cryptocurrency platforms, can be vulnerable to hacks if proper security measures are not in place. However, reputable companies that launch Bitcoin ETFs usually invest heavily in advanced security protocols to prevent this from happening.
To minimize the risk of hacks, Bitcoin ETFs typically use techniques like cold storage (storing Bitcoin offline), multi-signature wallets, and other encryption tools to safeguard the assets. Still, there’s always some level of risk, and it’s essential for these ETFs to have insurance and robust security audits in place.
In short, while the risk of hacking exists, strong security measures can make such incidents less likely.
Editor: Lydicius
