Hackers Gonna Hack … But Crypto Will Bounce Back

While price action may dominate headlines, the bigger story is that the crypto space doesn’t care. Crypto projects, infrastructure, etc., are all growing at an unprecedented pace.

And while this is amazing for so many reasons, it also means that crypto is “moving fast and breaking things.” For a finance system based on computer code, “moving fast and breaking things” means letting bugs and problematic features into the code, which can later be exploited by savvy hackers.

This week, hackers have been busy at doing exactly that. Just today, a hacker was able to steal $320 million in crypto by relying on a deprecated feature within the Solana (SOL, Tech/Adoption Grade “D”) code.

While the flaw has been patched, the damage is done. Not only to the Wormhole token bridge and Solana itself, but to the confidence investors have toward trading and transacting on decentralized finance (DeFi) platforms.

Overall, not a good look for Solana:

But while traditional media, like Reuters, enjoys using instances like this to point out how DeFi presents a “huge risk” due to it being “mostly unregulated,” the truth of the matter is that traditional finance is much, much worse.

Throughout history, banks have shown they can be potent actors in facilitating illicit financial activities ­— from money laundering to drugs and illegal weapon trade, as well as various other criminal activities.

Crypto simply doesn’t come close.

But just because crypto isn’t as bad doesn’t mean it’s entirely safe ... or that we shouldn’t strive to fix what issues there are. As with other things in life, one must do their due diligence before investing or trading on any of the platforms.

Indeed, the entire internet is rife with malicious actors. In the past, they were coming for your credit card. Nowadays, they’re coming for your digital wallet, as we warned earlier this week:

It’s frustrating, but regulators look to bad actors like this to justify cracking down on crypto.

That’s bad enough, but understandable. What’s more frustrating is crypto regulation becoming a political move in the dance between world leaders, leaving investors across the globe bracing for impact.

The U.S. administration has a history of making bad decisions characterized by both overregulation and regulatory uncertainty when it comes to crypto. This show of incompetence has left the country behind in terms of global crypto adoption. If the past is any indication, this latest overarching regulatory impulse will most likely cause further damage.

The silver lining is that U.S. policymakers will eventually have to accept that crypto is not going away.   Therefore, it’s crucial they take a more hands-off approach to regulating the crypto industry —and instead allow the market to grow and mature organically.

Crypto is here to stay, and with that maturation will come increased stability.

So, we’ll continue exploring new ways to help you find opportunities in this ever-growing sector, like the interesting new possibility we explored in this Twitter thread:

We can only hope regulators can accept this fact sooner rather than later.

Until next time, stay safe and trade well.

Best,

Jurica Dujmovic