What to do if the crypto exchange is no longer responding or was hacked
Failure of an online system—whether that is a crypto exchange or online wallet—can have various causes. It might be that the internet is down, which is very unlikely. The system’s servers could fail. It could happen, but shouldn’t. The website could be impounded by the authorities. That has happened a few times, including summer 2017, in the case of the BTC-e exchange. Hackers can also break into an exchange and steal the data. That also keeps happening.
You have to react IMMEDIATELY!
You have to react IMMEDIATELY!In all these cases, the greatest urgency is required. As a rule, this does not happen overnight. Something happens in the run-up, something that is reported in the media. In the case of crypto exchange BTC-e, the news went through the media that one of the supposed owners, a Russian, had been arrested in Greece at the request of the US authorities. That was the point at which everybody should have reacted. So how should you react? It’s quite simple.
This is what you have to do straight away
Immediately start a different wallet and import the private key.
As soon as the money is available in the new wallet, transfer it immediately to another new wallet with another provider or a hardware wallet or paper wallet.
Done. The money is safe. Transferring to a new wallet is a very important step because the hacker is very probably in possession of the private key for the original wallet. The hacker can still get at the Bitcoin with this because they are still linked to the “old” private key. Just as you yourself can see the Bitcoin sitting in another wallet with the private key, so can the hacker. That is because it does not depend on the wallet itself, but the private key which belongs to the address, and that is still in the possession of the hacker. It is only if they are transferred that they belong to a new address with a new private key.
It is even easier, of course, if the crypto exchange can still be reached. If that is possible, you can save the first step and send the assets straight away through the exchange to a different, completely new address.
If the money has not yet been transferred from the exchange by the intruder, then you can do so yourself quickly. Speed is of the essence. If, however, you do not have the private keys yourself, then your hands are tied and you can only hope that it was a false alarm. Which it generally isn’t.
Checking the crypto exchange won’t help
If you still have them, you can’t even use the private keys to check whether the money is still there. If the keys are stored online in a crypto exchange or a wallet, then the hacker has them and can move the money at any time. Therefore, you should always transfer to another address immediately. Then the hacker may still have the old keys, but there is no money at this address anymore. The money is now assigned to an address to which only you have the correct private keys.
When you use an online system—which is necessary in some cases—then you have to keep your eyes and ears open and be ready to react quickly. You should be prepared and have at least one additional wallet to which you could send your Bitcoin quickly. But that should go without saying, as only the least money necessary should be located in an online system—most of your assets should be kept securely offline.
Furthermore, it is very important to understand that you can access your Bitcoin directly with the passphrase or the private key of a wallet other than that affected, allowing you to then transfer them from the affected private key and to safety.
This is why you HAVE to own the private key yourself
This is an important point because, under some conditions, you can’t even log into the online system anymore. When the US authorities impounded the eBTC Bitcoin exchange, the log-in page showed only that the website had been impounded by the US authorities. You couldn’t do anything! You couldn’t even log-in anymore. However, that is not necessary, as the passphrase and the private key work with every wallet. It does not depend on the wallet or the website, only and exclusively on the private key.
I have explained this before, but it is good to restate it as a reminder in this context. Always keep in mind that the private keys are the only key to the crypto-coins. Neither Bitcoin nor ether nor any of the other genuine cryptocurrencies are in the wallets or in an exchange or anywhere else. There are only chronologically saved transfers in the blockchain, which create a portfolio when they are calculated together. The private key is the only key to the cryptocurrency
Anybody can calculate this portfolio—at least, for most cryptocurrencies—but you can only move this portfolio if you sign the transaction with the associated private key. Which wallet you sign it from makes no difference at all.
Transferring 100 million isn’t a problem
As soon as it is signed, the Bitcoins are transferred. It is like going to the Wells Fargo with your private key and accessing your account at the Citybank if the Citybank is closed. You could do the same from any bank and from every terminal of every bank. In today’s world, that is possible—up to a certain transaction limit—with the conventional banks and your bank card. In the crypto world, that seamlessly works with $100 million—if you have the private keys.
This a short story out of my book
Bitcoin, Blockchain & Co.
The Truth, and Nothing but the Truth
Information about Bitcoin, Ethereum, Blockchain and other cryptocurrencies for interested parties, for beginners and advanced.
To be active in the emerging world of cryptocurrency, you must first to understand the systems that underpin it and that will help to shape the future. It is vital that you understand three fundamental pieces of information before you begin any activity related to cryptocurrencies. Without these three key considerations, you cannot fully understand and navigate the intricacies of the crypto world.
Without these three foundational rules, you become extremely vulnerable to financial losses if you become active.
For that reason, you should read thus book. Internalize the information and let them sink deep into your subconscious. The principles in this book must be applied intuitively. Gauge everything — every single thought and decision — by these principles. With these three principles at the core of your every decision, you will be safe from fraud and you will understand how our world is going to work in the near future.
