Week2 Explain the causes and effects of data security breaches.

BLOG: Learning Outcome 1 

Example of Data Breach

In February 2025, North Korean hackers stole approximately $1.5 billion in Ethereum from ByBit, one of the largest cryptocurrency exchanges.
The hackers exploited a vulnerability in a third-party wallet software during a fund transfer, allowing them to steal the assets. Within the first 48 hours, at least $160 million was laundered through mixing services, making recovery of the stolen funds extremely unlikely.
To date, this case is considered the largest cryptocurrency theft.


Company losses due to data leak:

 1)The company will lose the trust and reputation of other companies and customers.

 2)Financial losses and Operational costs - the company needs to compensate for the loss, pay fines, spend money on the courts, finance the search and investigation and fix the problem


Customer losses due to data leakage:

1)Financial damage

2)It can cause stress

3) Reduced trust

 

Cause of the data breach

The leak occurred due to a vulnerability in a third-party wallet's software. An error in the funds transfer process allowed hackers to intercept and steal the cryptocurrency.

 

How it could have been prevented

1) Stricter security checks for intermediaries/supporting companies – the company was required to test and audit all third-party wallet software to identify vulnerabilities.


2) Transfer monitoring – real-time anomaly detection could identify suspicious transfers.

3) Separate cold storage – the majority of client funds were required to be stored in offline wallets.


4) Multi-signature authentication – requiring multiple independent confirmations for large transfers would provide an additional layer of security.

 

Stanislav Samokysh EC2134771




 

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