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How does crypto exchanges get hacked?

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The main reason why these hacks occur:

If an exchange were to store all of your crypto in one wallet and this wallet ends up getting connected to the internet at all times with a not secure security wall and provides high levels of access to one individual, your crypto is at risk! The fact that one individual has very high level of access means there is no multisignature security in the wallet and hence it only requires breach from one key-holder to reduce integrity of the whole system.

How to keep your Cryptos secure?

Some hacks takes place due to security loopholes that the hackers exploited or some may even be due to an employee making a mistake when multisignature authentication is not needed. Below are possible ways for exchanges to improve its security.

Use of cold wallets that require multisignatures would mean that your cryptos are kept offline and requires permission from multi parties for any change to the wallet to take place. Hence, keeping your cryptos safe.

The Cryptocurrency industry is still one in its infancy stage. It is of utmost importance for echnages to take proper security measures and learn from past occurrences to avoid the future hacks that are similar in nature. Given the relative newness of blockchain technology, any security loophole or vulnerability will end up getting exploited.

Answered question