Blockchain security incidents are frequent, how to protect personal encryption asset security?

With the rise of blockchain applications such as DeFi and NFTs, user assets are gradually shifting from centralized platforms to decentralized wallets, cross-chain bridges, and lending products. However, incidents of on-chain asset theft occur frequently, leading to blockchain being humorously referred to as a "hacker ATM." Some of these security incidents stem from code vulnerabilities, while others are caused by human negligence.

Wintermute Faces Significant Financial Losses

On September 20, renowned encryption market maker Wintermute suffered a hacker attack, with losses as high as $160 million. The company's founder stated on social media that the company's centralized trading and over-the-counter trading businesses were unaffected, and solvency is still guaranteed. Among the 90 stolen assets, only two had individual values exceeding $1 million, making a large-scale sell-off unlikely.

The blockchain security company quickly identified the hacker's address. According to analysis, approximately 73% of the stolen funds were stablecoins, 8% were WBTC, and 6% were ETH. The attacker deposited $114 million into a certain DeFi protocol for liquidity mining.

Security experts speculate that this attack may be related to the stylish wallet created by Wintermute using a third-party tool. The company's founder later confirmed that they did use the tool to create wallet addresses in June, with the aim of optimizing Gas fees rather than acquiring stylish numbers. Although they attempted to abandon the old keys after learning of the tool's vulnerabilities, they failed to promptly revoke the signature permissions of the affected addresses due to internal operational errors.

Regarding the stolen funds, Wintermute stated that it is willing to pay 10% as a bounty, approximately 16 million dollars, in exchange for the full return. The company emphasized that it will not fire employees, change strategies, or stop its DeFi business due to this incident.

However, on-chain data shows that Wintermute currently has over $200 million in DeFi debt to multiple counterparties, with the largest being a $92 million USDT loan due on October 15. If the stolen funds cannot be recovered in time, the company may face a debt crisis.

Wintermute once suffered losses due to human error

It is worth noting that this is not the first time Wintermute has suffered losses due to human factors. In June of this year, while providing liquidity services for a certain Layer 2 network, the company lost control of 20 million tokens due to an address configuration error. Fortunately, the hacker eventually returned most of the tokens, and Wintermute promised to compensate for the remaining losses.

How Individuals Can Avoid the Risk of Crypto Asset Theft

Given that institutions frequently incur huge losses due to human error, ordinary users should be more cautious in protecting their encryption assets. Here are some suggestions:

1. Avoid using third-party tools to create wallets, and insist on using native encryption wallets. Third-party tools may have security risks and can be easily monitored or attacked.

2. Use a multi-signature mechanism for the main asset wallet. Although it is not suitable for high-frequency trading, it is an effective security measure for most users.

3. Never copy and paste to save your private key. Many devices and applications may have access to the clipboard, posing a risk of leakage. Even if it seems temporarily safe, it may be targeted by hackers waiting for the right moment.

4. Carefully check the authorized contracts and assets when performing operations on the Blockchain. Especially when using new platforms or suspicious websites, be sure to verify the authenticity of the contract address.

5. Limit the authorization amount and promptly revoke unnecessary authorizations. Even for well-known platforms, only authorize the required number of tokens and revoke the authorization immediately after use. Authorization management can be done through the block explorer of each blockchain.

In the world of Blockchain, security is no small matter. Stolen assets are often difficult to recover and lack legal protection. Therefore, users must be especially cautious when performing on-chain operations and take multiple measures to protect their digital asset security.