There was no shortage of crypto victims this summer.
On August 8th in Singapore Hodlnaut joined other lenders vault and Celsius and Singaporean exchange Zipmex in suspending user crypto withdrawals due to “current market conditions.”
The measure was reportedly taken to “stabilize liquidity,” a phrase also used in Celsius’ withdrawal freeze Notice.
Without warning, investors were hit with the news that the majority of their digital assets were effectively confiscated while the companies worked out a recovery plan. Many are affected to varying degrees of severity, and the human cost is often high shocking to read.
Left to dry, the recent liquidity crisis has reminded many of the industry’s words of wisdom: Not your keys, not your coins. And new evidence now shows many are taking those words to heart this time.
While crypto companies file for bankruptcy or receive bailouts; while Coinbase, Gemini and blockchain.com have all announced mass layoffs; while Solana and Nomad stagger one after the other multi-million dollar attacka sub-sector is thriving: hardware wallets.
Crypto security is the focus
hardware wallets are often touted as the ideal option for long-term crypto storage.
They keep users’ private keys safe offline. Unlike software wallets, they’re largely immune to online attacks, although they’ve been the target of phishing attacks, the most recent of which happened this year when a Mailchimp newsletter database contained Trezor users’ emails was compromised.
So they’re not invulnerable, but if you’re careful and discerning, hardware wallets can be a much better alternative than their software counterparts.
That top models from Ledger or Trezor are also resistant to physical tampering, making them a safe choice for anyone looking for long-term storage of digital assets.
An exploit in Slope mobile wallet applicationsfor example, resulted in Solana users’ private keys “accidentally submitted‘ to a ‘third party’, according to Solana’s developers. The attacker made off with $4.5 million SOL and USDC.
Binance CEO Changpeng Zhao later tweeted that those affected could send their funds to a hardware wallet.
There is an active security incident on Solana. Many (over 7000+) wallets are emptied by SOL & USDC. Cause not yet known. Maybe permissions for apps. Send the funds to a cold wallet or CEX like @Binance for withdrawal. https://t.co/nQrBXAgCbf
— CZ 🔶 Binance (@cz_binance) August 3, 2022
Amid the wave of bankruptcies, freezes and hacks, hardware wallet sales have surged.
Philip Costigan, a senior account manager at Ledger, says people will always think about security at some point. In the Ledger Op3n conference in June, the company announced that it had sold over 5 million units. Costigan says, “Recent problems with lenders, bridge hacks, the Solana wallet exploits, etc. have only increased demand and sales.”
He said decrypt that ledger sales increased “4.5x” afterwards Celsius’s bankruptcy.
Ledger is not alone either. Trezor and SafePal have also seen strong increases in sales recently.
Users “wake up”
decrypt Email representatives from Ledger, Trezor, and the Shenzhen-based hardware wallet maker SafePal asking if they’ve seen an increase in sales over the last crypto winter, and all three have unanimously confirmed this.
SafePal responded that it had seen “significant growth” in both product and asset management, attributing this “to the collapse of centralized financial institutions and the liquidity crises affecting the crypto industry.”
SafePal didn’t offer any specific sales information, but CEO Veronica Wong said her firm believes “growth will continue” as crypto continues to gain traction among newcomers.
A Trezor representative also confirmed that he has seen “an increased interest in self-custody solutions in recent months, although the effects of the ongoing bear market are also being felt.”
The company said crypto users are “waking up to the fact that they could lose access to their assets at any time,” adding, “We believe this is a good development that should ensure user losses aren’t as widespread.” and are great as they were in the recent bankruptcy cascade.”
Costigan echoed that sentiment and narrated decrypt that “this almost had to happen for people to realize the importance of security for wealth preservation.”
On the day of the Solana wallet exploits, Ledger hardware wallet sales had “more than tripled” before Ledger announced it”MOVESOL2LEDGER” discount code that expired on August 7th and offers new buyers a 10% discount on the Nano X and Nano S Plus models.
Ledger reported “a bigger surge” after the announcement, saying both models “see similar interest.”
“Although it’s really disappointing and sad for a lot of people to have lost if something like this would happen. I think people are realizing now why they need to focus more on safety, and I think we’ve seen that reflect in the sales,” Costigan said.
Experts say regrettable and inevitable sacrifices have been made, but the spotlight is clearly turning away from yield farming and meme coins. Now, crypto security is taking center stage.
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