A hot wallet is a cryptocurrency wallet that is connected to the internet, making it readily accessible for frequent transactions. Private keys are stored in an online environment, which offers convenience but also presents a higher risk of compromise compared to offline storage methods. It is generally used for active trading or everyday spending.
Context
The security of hot wallets is a persistent concern, particularly for exchanges and platforms that hold large quantities of user assets online. News of hot wallet breaches can lead to substantial asset depletion and erode trust in the affected services. Users must remain vigilant about securing their online wallets through robust authentication and by minimizing the amount of digital assets stored in them.
A critical failure in access controls allowed politically motivated attackers to drain $90 million from Nobitex's hot wallets, exposing systemic infrastructure vulnerabilities.
A critical private key compromise enabled attackers to drain $48 million from BtcTurk hot wallets, exposing systemic risks in centralized exchange key management.
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