Binance, the world’s largest cryptocurrency exchange by volume, has been hacked with $40m worth of bitcoin disappearing in an instant. Attackers stole API keys, two-factor authentication codes, and other vital information that led to the theft of 7,000 bitcoins, the contents of the company’s bitcoin hot wallet.

Binance CEO Changpeng Zhao quickly confirmed the attack in an official statement:

The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.

Binance may be the best-known exchange to get hacked this year, but astonishingly, it isn’t the only one. According to the crypto analytics firm CipherTrace, $356 million in cryptocurrency was stolen in the first three months of 2019.

When it comes to security, many centralized exchanges are failing, and ultimately, its users and the industry at large that pay the price. Centralized exchanges are constantly getting hacked — the biggest known was the Mt. Gox hack in 2014 which resulted in the loss of 740,000 bitcoins, worth around $3bn in today’s value.

Centralized exchanges are inherently insecure. When handing over custody of private keys, users lose control over their own funds. Because of these security flaws, the cryptocurrency industry is turning towards decentralized exchanges; the demand for these secure alternatives is experiencing constant growth. Adoption has still been slow, however, as first-generation decentralized exchanges have been unable to fulfill their promise.

Now, the Resistance decentralized exchange (ResDEX), our upcoming second-generation decentralized exchange, tackles the three fundamental issues that have hindered the adoption of the technology so far, which encouraged many users to stick with centralized exchanges despite the security risks: usability, speed, and liquidity.

ResDEX offers users a way to trade crypto safely, eliminating the security flaws that traders have had to endure. Using a decentralized platform, like Resistance, users never lose control of their private keys because cryptocurrencies are stored locally and not on the exchange, with the possibility to also store funds in a hardware wallet that they hold in their own possession. Our CEO, Anthony Khamsei states that

The Binance hack is the latest in a long line of devastating cyber attacks. By handing over their assets to a third party, users are forced to rely on a single point of failure, leaving their funds vulnerable. Decentralized exchanges eliminate these issues, which is why we created ResDEX.

Alongside a privacy-focused blockchain, ResDEX allows users to trade without relying on a central authority. Users never have to forfeit control of their private keys or trust a middle man to handle their assets. By trading peer-to-peer, ResDEX users avoid third-parties altogether.

If you’d like to learn more about Resistance and the decentralized exchange we are building, head over to our Introduction To ResDEX article below.