Title: Hardware Wallets Sell Off As Crypto Heists Increase
Aug 24, 2022 05:02AM ET
DeFi Protocols and other cryptocurrency traders are acquiring hardware wallets en masse to deal with the wave of hacks that has rocked the crypto industry.
These physical wallets provide real protection to users against hacking attacks.
Adam Lowe of CompoSecure Inc. believes that the crypto winter has created "heightened awareness in consumers about protecting their digital assets."
To combat the rising tide of thefts on cryptocurrency trading platforms, cryptocurrency traders are acquiring a huge number of storage devices, such as hardware wallets or "cold wallets," which has led to the sales of companies that manufacture these types of devices.
The increase in cybercrime has not only prompted the hiring of cybersecurity and network auditing companies but also the purchase of these wallets that are not connected to the Internet and that better protect cryptoassets.
French startup Ledger is a clear example of how this business is evolving. The company's daily sales grew a whopping 400% in just 24 hours after the recent massive theft of its blockchain-based Solana virtual wallets.
The attack, which generated losses of more than $5.2 million, caused an immediate increase in demand for these products, said Ian Rogers, the company's director of experience.
Hardware wallets are considered the most secure places to store cryptocurrencies. They are hard drives on which the user can store their personal access codes.
Because the funds are not exposed to hacking attacks or flaws discovered through exploits, they provide companies and their customers with a higher degree of protection.
Another wallet manufacturer seeing a rapid increase in sales is Ellipal. The Hong Kong-based company has sold 30% more wallets and received 50% more traffic to its website since the Solana wallet hack, a company spokesperson said.
Fear that an attack or bankruptcy of one of these companies could complicate withdrawals has forced them to get hardware wallets.
Centralized crypto exchanges, including Binance and Coinbase Global Inc., now offer customers a variety of digital wallet options. However, these platforms control their customers' access codes.