December 13, 2023

Blockchain, Crypto And Web3 Incident Response

Blockchain, Crypto And Web3 Incident Response

Image credit: crypto investigators

Crypto hacks are one of the obstacles to the mainstream adoption of cryptocurrency and other web3 protocols. Back-to-back hacks have exposed the vulnerability of the crypto industry and undermined investors' confidence.

In 2023 alone, malicious actors and hackers have stolen over $700m from various crypto and web3 protocols. A huge chunk of this was never recovered and when projects get exploited unsuspecting users usually end up at the losing end. 

So having a robust security framework in the crypto and web3 space is an absolute necessity; smart contracts and codes of crypto-related systems should be guided with state-of-the-art security measures that are in line with industry best practices. 

This includes having an incident response policy or mechanism to swiftly address and mitigate security breaches

Hashlock Crypto Incident Response 

When it comes to mitigating security breaches and suspicious activities, preparation and speed are key, that is why here at  Hashlock our incident response service arms crypto companies and protocols with the expertise and capabilities needed to recover lost funds in the event of an incident such as a hack or unauthorized network intrusion that involves cryptocurrency theft.

At Haslock we are ready to act quickly when an incident occurs, minimize your losses, and work to recover funds. 

Hashlock sets up, analyzes, and manages on-chain monitoring technology to instill confidence among stakeholders, enhance transparency, and facilitate faster incident response

Why Choose Hashlock? 

Hashlock offers 24/7 smart contract and infrastructure monitoring and surveillance looking out for any suspicious activity. 

Our certified team of smart contract security and blockchain forensics experts excels at conducting time-critical cybercrime incident response.

We offer rapid response to suspicious activities jumping on and responding to any incident helping to remediate hacks as quickly as possible

Hashlock guides your crypto/web3 infrastructure or smart contract with mechanisms that are in line with industry best practices. 

Incident Response And Web3 

Incident Response refers to the organized approach and set of procedures taken to identify and manage security breaches or other significant adverse events related to on-chain and off-chain components. 

The primary goal of incident response is to handle exploits in a manner that limits lost user and administrative funds, reduces recovery time and costs, and maintains the reputation of the exploited project.

The incessant reports of hacks and exploitation of various web3 and crypto projects are an indicator that securing a project does not end at the audit level but should be complemented with an incident response mechanism. 

It is a rapid response service used by cryptocurrency businesses and large organizations that are high-risk targets for cyber attacks or unauthorized network intrusions that involve cryptocurrency theft or demand for ransoms(ransomware). 

Current State Of Incidence Response In Web3

Oftentimes, we observe that when projects announce they have been exploited, they usually mention collaborating with authorities to recover stolen assets. However, we typically don't hear from the project again regarding the exploit

This indicates just how the lack of incident response practices is widespread across web3. Some of the current response to security breaches includes: 

  • Whitehat Communities

These are volunteer groups consisting of ethical hackers and security professionals. These communities focus on responding to security incidents, reporting, analyzing, and preventing losses by exploiting bugs during ongoing incidents to return the funds.

  • Governance Security Council Some web3/crypto organizations have embraced the concept of decentralized security governance through a multi-sig security council. The multi-sig responsible for managing their incident response functionality includes security experts who offer guidance on when to activate the incident response functionality.
  • Automation 

Crypto companies and protocols do this by defining risk parameters and security policies around when incident response functionalities should be used. They can place certain alerts that can trigger the execution of automated on-chain actions.

The Bottomline 

Indeed the current state of incident response in web3 is far from perfect and as the crypto space continues to grow and mature this aspect of smart contract/blockchain security will also take shape and more crypto projects/protocols will complement their security measures with IR.  

Without further ado, we invite you to contact us at Hashlock today. We are here to address your smart contract, blockchain, and crypto security needs, ranging from incident response to penetration testing, auditing etc.

[Author’s Note: This article does not represent financial advice, everything written here is strictly for educational and informational purposes. Please do your own research before investing.]

Author: Godwin Okhaifo