It is early days for KuCoin clients after the recently announced hack that saw $200 million USD worth of digital assets stolen, but it is situations like this where Etana feels compelled to reinforce the importance of using a custodian.
Etana’s secure platform features two services that can mitigate against exchange hacks that affect both digital and fiat assets. In the case of the KuCoin hack, it appears only digital assets like Bitcoin, Ether and others were stolen.
First, Etana’s global custody service will always hold the client’s digital assets in a wallet separate from the exchange. Typically, exchanges keep their client’s crypto in hot wallets for easy access to trading. The downside to this is obvious whenever there is a hack: it is incredibly easy for these assets to be stolen. When your coin is held in custody at Etana, it is made available to the exchange for trading under certain client-approved circumstances, creating a gap where a hacker who infiltrated an exchange cannot pass. When your coin or tokens are in custody at Etana, they are out of the reach of hackers who penetrate the security of an exchange.
Our global custody service works hand-in-hand with our off-exchange settlement technology. Etana and our exchange partners use an advanced ledger system that controls internal transactions. This means Etana clients can trade their coin at one of our exchange partners without that coin being on the exchange until the transaction is complete. Put simply, you can trade on the exchange with the convenience of a hot wallet and security of a cold wallet.
Ultimately, Etana’s mission is to provide the platform, technology and security to trade safely and invest in digital currency. We’re not singling out KuCoin - you could use nearly any recent exchange hack as an example why custodians are important in crypto. If you use a custodian like Etana, the KuCoin hack (or other hacks like it) would simply be a data breach, not the theft of your assets.