The following is a contributed article from a content partner of Benzinga
Even only a few weeks into the final quarter, it’s fair to say that 2020 has been a wild year. Leaving aside the public health crisis and the broader economic situation, we’ve seen some pretty seismic events happening over recent months in the crypto space alone. Many of them hark back to the bad old days when crypto was generally considered to be the wild west of finance.
At the start of October, the third-biggest hack in the history of cryptocurrency shook the entire industry. In the early hours of a Saturday morning, news emerged that hackers had struck KuCoin, one of the world’s largest trading platforms. The company declined to disclose exactly how much had been taken. Later estimates put the total sum at over $280 million, meaning that the only hits with greater values involved were the infamous Mt.Gox attack and the 2018 Coincheck heist.
In the KuCoin case, a critical difference was that the hackers stole a large variety of cryptocurrencies. Thanks to the fact that centralized entities manage many of these tokens, KuCoin was able to reinstate many of the stolen funds by working with projects to re-issue their assets. The company has since said it’s identified the suspects, and law enforcement is now involved. However, it remains unclear what happened, exactly how much was stolen, or what KuCoin is doing to prevent it from happening again.
Criminal Charges for Exchange Founders
In another damning blow for the industry, the US Commodities and Futures Trading Commission (CFTC) announced it was bringing criminal charges against the founders of BitMEX. The Seychelles-registered exchange has been in operation since 2014, during which time it has dominated the cryptocurrency futures market with its flagship BTCUSD perpetual swap contract.
However, after a year-long investigation, the CFTC has now filed charges against the company’s three co-founders and one senior executive. The four are charged with evading money laundering regulations by failing to put in place know-your-customer checks.
Most recently, OKEx halted withdrawals after the company lost touch with one of its executives, who was apparently co-operating in a “public security inquiry.” The executive is one of the few people holding the private keys to the exchange’s wallet. At the time of writing, the incident was still unfolding. However, combined with the BitMEX charges, it seems that crypto exchange operators can expect to be under heavy scrutiny.
For the broader cryptocurrency space, the timing couldn’t be worse. After the dark years of Silk Road and Mt.Gox started to fade into the distance, crypto began to gain the sheen of respectability.
Furthermore, a recent report from Fidelity Digital Assets indicates that a new influx of retail investors is set to enter the space. After all, the traditional markets are currently shaky due to the global pandemic, and Bitcoin has been…