Microsoft Research into Eastern European Hacking Should Cause Alarm for Crypto Exchanges

Microsoft released a report detailing the extent of Russian hacking since the beginning of the conflict in Ukraine. The report details how the attacks were correlated with physical military operations on the ground. This included a cyberattack on a broadcaster at the same time a missile strike was occurring against a television tower in a general attempt to discourage disinformation. One fintech CEO is warning that this dovetailing on strategy could spell trouble for digital asset exchanges.

“It seems clear that cyberattacks out of Russia are being carried out in relation to what’s happening on the ground. Gazprom’s decision to cut off Poland and Bulgaria from Russian energy makes it clear that Russia is willing to use economics as a political weapon. If that’s true, and if Russia continues to see decreased revenues from its energy sector, it is absolutely conceivable to think that digital asset exchanges could see increased activity on the cybercrime front,” 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.

In particular, Microsoft noted:

“Starting just before the invasion, we have seen at least six separate Russia-aligned nation-state actors launch more than 237 operations against Ukraine – including destructive attacks that are ongoing and threaten civilian welfare. The destructive attacks have also been accompanied by broad espionage and intelligence activities. The attacks have not only degraded the systems of institutions in Ukraine but have also sought to disrupt people’s access to reliable information and critical life services on which civilians depend, and have attempted to shake confidence in the country’s leadership. We have also observed limited espionage attack activity involving NATO member states, and some disinformation activity.”

“As the industry continues to see hacks against its institutions, I truly believe that providers really need to better explore their options. Is the software they’re running hack-proof? Is their code fully vetted? Are their vendors up to providing the kind of security that their customers should demand? These are the tough questions that every exchange operator should be considering,” 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. Modulus has provided its exchange solution to some of the industry’s most profitable digital asset exchanges, including a well-known multi-billion-dollar cryptocurrency exchange. Over the past twenty years, the company has built technology for the world’s most notable institutions, with a client list which includes NASA, NASDAQ, Goldman Sachs, Merrill Lynch, JP Morgan Chase, Bank of America, Barclays, Siemens, Shell, Yahoo!, Microsoft, Cornell University, and the University of Chicago.

“Whether we’re talking about Russian interests, or hackers with ties to North Korea, or even unaffiliated or loosely affiliated entities, it is clear that attacks are ramping up. The industry must be able to respond in a competent manner. Nine figure losses simply aren’t sustainable for an industry. Especially since improving our defenses is so comparatively inexpensive. Invest in security and risk management on the front-end. That’s the best bet for long-term success,” said Gardner.