ZachXBT who works as a blockchain investigator pleaded for the cryptocurrency industry to improve its security breaches and fight against illegal fund transfers. After helping in the recent Bybit hack he explained that systemic weaknesses and insufficient actions by major players grant attackers the opportunity to exploit security deficits on a large scale.
Decentralized and Centralized Platform Issues
ZachXBT identifies most trading volume among so-called decentralized protocols stems from illegal parties with North Korea (DPRK) entities among them. These platforms demonstrate selective responsibility when it comes to handling illegal financial transactions. Centralized exchanges handle threat intelligence slowly which lets criminals wash funds they stole within a short time after the theft occurs.
Ineffective Security Measures
Know-your-transactions solutions aiming to stop illegal fund transfers show regular failure and know-your-customers procedures fail due to stolen personal data and available account sales platforms. ZachXBT addressed how the KYC problems demonstrate regulatory failure to oversee financial institutions in all sectors including cryptocurrency.
Barriers to Industry Solutions
ZachXBT acknowledged government intervention issues but doubted the ability of the industry to effectively manage itself. Major crypto exchanges operate without quick incident response teams for handling time-sensitive threat information whereas stablecoin companies rarely block addresses that link to major cyberattacks directly.
Compliance Tool Shortcomings
The compliance tools which Coinbase and Circle along with other major companies implement fail to correctly highlight unlawful transactions according to ZachXBT. Certain decentralized protocols refuse to redesign themselves after validating that illegal transactions compose the majority of their activity.
Systemic Security Failures
The crypto sector stands criticized by ZachXBT for its lack of proactive security development even though he chooses to avoid government intervention policies. The absence of industry-wide progress in stablecoin policy administration and incident response techniques and analytical implementation will let criminal actors maintain their lead over security protocols across the sector.
