Fintech CEO: Vastaamo Breach Could Spell Disaster for Crypto Exchange Startups

This month, Wired broke a story about the Vastaamo data breach. Vastaamo, a mental health start-up, announced that their systems had been hacked, exposing patient information, including email addresses, social security numbers, and even notes that therapists had taken during sessions. Hackers held the information for ransom, sending patients notes requesting payment in cryptocurrency.

“There are parallels here to the crypto industry, without a doubt,” said Richard Gardner, CEO of Modulus, a US-based developer of ultra-high-performance trading and surveillance technology that powers global equities, derivatives, and digital asset exchanges. “There are few more concerned about privacy than those in the mental health industry. Health data is among the most sensitive information a person has. Yet, the stewards of this information were simply ill-prepared to protect it.”

“What we see with start-ups, regardless of industry, is that they are in a rush to get to market. That makes sense, of course. The faster you get to market, the sooner you can start soliciting customers and bringing in revenue. But, the challenge, when you’re talking about a technology driven industry, is that the technology must hold up. What I mean by that is, if you’re an exchange — whether of digital assets or mental health information — and you’re cutting corners in your technology stack, whether done to save time or money, you’re really betting on your own failure,” said Gardner.

Modulus is known throughout the financial technology segment as a leader in the development of ultra-high frequency trading systems and blockchain technologies. Over the past twenty years, the company has built technology for the world’s most notable exchanges, with a client list which includes NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago. Notably, Modulus recently filed for a patent on its Exchange Trust Score System, a revolutionary solution which aims to restore trust in financial exchanges, particularly those dealing in digital assets and cryptocurrencies.

“When you build your technology to fail, it means that you release it before ensuring that it can stand up to success. It’s easy to build technology that can support relatively few users. It’s easy to build technology that repels hackers when your exchange isn’t worth hacking. It’s another thing entirely to build technology that works as designed during peak traffic and continues to repel hackers once you’re successful enough to draw interest from experts. The more successful you are, the more value there is in hacking your exchange. Unfortunately, most start-ups don’t consider this component when they’re racing to market. It is why exchange operators must seriously consider their long-term needs before engaging with a technology vendor,” opined Gardner.