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$145 million funds frozen after death of cryptocurrency exchange admin

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Roughly $145 million worth of cryptocurrency funds are frozen in the cold (offline) wallet of a Canadian cryptocurrency exchange portal after the death of its owner.

QuadrigaCX, the exchange, has filed for legal protection against its creditors in accordance with Canadian law until it regains access to the funds, according to a message posted on its website.

Problems for the exchange started in December 2018, when its CEO, Gerry Cotten, died of Crohn’s disease in Jaipur, India.

Cotten was the only one who had access to the company’s cold wallet. Despite his death, the exchange continued to operate for nearly a month by using the liquidities stored in its hot (online) wallet and fiat currency bank accounts.

Cotten’s death wasn’t even noticed by most of the exchange’s users until two weeks ago when his widow, Jennifer Robertson, announced his passing on Reddit, triggering a mass withdrawal of funds that destabilized the exchange.

“For the past weeks, we have worked extensively to address our liquidity issues, which include attempting to locate and secure our very significant cryptocurrency reserves held in cold wallets, and that are required to satisfy customer cryptocurrency balances on deposit, as well as sourcing a financial institution to accept the bank drafts that are to be transferred to us,” the company’s board said in a message posted this week on its website.

“Unfortunately, these efforts have not been successful.”

Some of these efforts “to locate and secure” the cold wallet funds included hiring an IT consultant to attempt to decrypt Cotten’s laptop and gain access to the cold wallet password, according to cryptocurrency news portal CCN.

This wallet is at the center of QuadrigaCX’s operation. It stores quite a considerable amount of funds, according to a court document filed this week by Cotten’s widow, obtained by CoinDesk, another cryptocurrency news site. In particular, around 0.5 percent of all Ether coins currently in circulation are now frozen in Cotten cold wallet, according to an Ethereum market analyst.

QuadrigaCX frozen funds

According to the same court filing, besides the $145 million worth of cryptocurrency funds frozen in Cotten’s cold wallet, the company also owes another $53.5 million in fiat currency, which it now cannot pay after using some of its reserves and after Canadian authorities froze other accounts due to irregularities –per an AMBCrypto report.

More and more users are getting angry that they can’t access their QuadrigaCX funds and for valid reasons. Some are even questioning Cotten’s passing, claiming that he actually may have faked his death and is now living off the funds he had stored on the cold wallet.

QuadrigaCX is now asking the court for a stay of proceedings that would preempt any lawsuits that may come from this whole mess. They are also asking the court to appoint international accounting firm Ernst & Young to oversee its operations until everything gets sorted out.

It is highly unlikely that the exchange would ever get access to these funds ever again.

A report from CipherTrace published this week revealed that hackers stole over $1.7 billion worth of cryptocurrency from exchanges in 2018. The QuadrigaCX case may be one of those strange events where users lose money and it’s not because of hackers or a scam.

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Retrospective thoughts on KubeCon Europe 2022

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I’m not going to lie. As I sit on a plane flying away from Valencia, I confess to have been taken aback by the scale of Kubecon Europe this year. In my defence, I wasn’t alone the volume of attendees appeared to take conference organisers and exhibitors by surprise, illustrated by the notable lack of water, (I was told) t-shirts and (at various points) taxis.

Keynotes were filled to capacity, and there was a genuine buzz from participants which seemed to fall into two camps: the young and cool, and the more mature and soberly dressed.

My time was largely spent in one-on-one meetings, analyst/press conferences and walking the stands, so I can’t comment on the engineering sessions. Across the piece however, there was a genuine sense of Kubernetes now being about the how, rather than the whether. For one reason or another, companies have decided they want to gain the benefits of building and deploying distributed, container-based applications.

Strangely enough, this wasn’t being seen as some magical sword that can slay the dragons of legacy systems and open the way to digital transformation the kool-aid was as absent as the water. Ultimately, enterprises have accepted that, from an architectural standpoint and for applications in general, the Kubernetes model is as good as any available right now, as a non-proprietary, well-supported open standard that they can get behind.

Virtualisation-based options and platform stacks are too heavyweight; serverless architectures are more applicable to specific use cases. So, if you want to build an application and you want it to be future-safe, the Kubernetes target is the one to aim for.

Whether to adopt Kubernetes might be a done deal, but how to adopt certainly is not. The challenge is not with Kubernetes itself, but everything that needs to go around it to make resulting applications enterprise-ready.

For example, they need to operate in compliance environments; data needs to be managed, protected, and served into an environment that doesn’t care too much about the state; integration tools are required with external and legacy systems; development pipelines need to be in place, robust and value-focused; IT Operations need a clear view of what’s running whereas a bill of materials, and the health of individual clusters; and disaster recovery is a must.

Kubernetes doesn’t do these things, opening the door to an ecosystem of solution vendors and (often CNCF-backed) open source projects. I could drill into these areas Service Mesh, GitOps, orchestration, observability, and backup but the broader point is that they are all evolving and coalescing around the need. As they increase in capability, barriers to adoption reduce and the number of potential use cases grows.

All of which puts the industry at an interesting juncture. It’s not that tooling isn’t ready: organizations are already successfully deploying applications based on Kubernetes. In many cases, however, they are doing more work than they need developers need insider knowledge of target environments, interfaces need to be integrated rather than using third-party APIs, higher-order management tooling (such as AIOps) has to be custom-deployed rather than recognising the norms of Kubernetes operations.

Solutions do exist, but they tend to be coming from relatively new vendors that are feature rather than platform players, meaning that end-user organisations have to choose their partners wisely, then build and maintain development and management platforms themselves rather than using pre-integrated tools from a singe vendor.

None of this is a problem per se, but it does create overheads for adopters, even if they gain earlier benefits from adopting the Kubernetes model. The value of first-mover advantage has to be weighed against that of investing time and effort in the current state of tooling: as a travel company once told me, “we want to be the world’s best travel site, not the world’s best platform engineers.”

So, Kubernetes may be inevitable, but equally, it will become simpler, enabling organisations to apply the architecture to an increasingly broad set of scenarios. For organisations yet to make the step towards Kubernetes, now may still be a good time to run a proof of concept though in some ways, that sip has sailed perhaps focus the PoC on what it means for working practices and structures, rather than determining whether the concepts work at all.

Meanwhile and perhaps most importantly, now is a very good moment for organisations to look for what scenarios Kubernetes works best “out of the box”, working with providers and reviewing architectural patterns to deliver proven results against specific, high-value needs these are likely to be by industry and by the domain (I could dig into this, but did I mention that I’m sitting on a plane? ).

Jon Collins from Kubecon 2022

Kubernetes might be a done deal, but that doesn’t mean it should be adopted wholesale before some of the peripheral detail is ironed out.

The post Retrospective thoughts on KubeCon Europe 2022 appeared first on GigaOm.

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Retrospective thoughts on Kubecon

Published

on

I’m not going to lie. As I sit on a plane flying away from Valencia, I confess to have been taken aback by the scale of Kubecon Europe this year. In my defence, I wasn’t alone the volume of attendees appeared to take conference organisers and exhibitors by surprise, illustrated by the notable lack of water, (I was told) t-shirts and (at various points) taxis.

Keynotes were filled to capacity, and there was a genuine buzz from participants which seemed to fall into two camps: the young and cool, and the more mature and soberly dressed.

My time was largely spent in one-on-one meetings, analyst/press conferences and walking the stands, so I can’t comment on the engineering sessions. Across the piece however, there was a genuine sense of Kubernetes now being about the how, rather than the whether. For one reason or another, companies have decided they want to gain the benefits of building and deploying distributed, container-based applications.

Strangely enough, this wasn’t being seen as some magical sword that can slay the dragons of legacy systems and open the way to digital transformation the kool-aid was as absent as the water. Ultimately, enterprises have accepted that, from an architectural standpoint and for applications in general, the Kubernetes model is as good as any available right now, as a non-proprietary, well-supported open standard that they can get behind.

Virtualisation-based options and platform stacks are too heavyweight; serverless architectures are more applicable to specific use cases. So, if you want to build an application and you want it to be future-safe, the Kubernetes target is the one to aim for.

Whether to adopt Kubernetes might be a done deal, but how to adopt certainly is not. The challenge is not with Kubernetes itself, but everything that needs to go around it to make resulting applications enterprise-ready.

For example, they need to operate in compliance environments; data needs to be managed, protected, and served into an environment that doesn’t care too much about the state; integration tools are required with external and legacy systems; development pipelines need to be in place, robust and value-focused; IT Operations need a clear view of what’s running whereas a bill of materials, and the health of individual clusters; and disaster recovery is a must.

Kubernetes doesn’t do these things, opening the door to an ecosystem of solution vendors and (often CNCF-backed) open source projects. I could drill into these areas Service Mesh, GitOps, orchestration, observability, and backup but the broader point is that they are all evolving and coalescing around the need. As they increase in capability, barriers to adoption reduce and the number of potential use cases grows.

All of which puts the industry at an interesting juncture. It’s not that tooling isn’t ready: organizations are already successfully deploying applications based on Kubernetes. In many cases, however, they are doing more work than they need developers need insider knowledge of target environments, interfaces need to be integrated rather than using third-party APIs, higher-order management tooling (such as AIOps) has to be custom-deployed rather than recognising the norms of Kubernetes operations.

Solutions do exist, but they tend to be coming from relatively new vendors that are feature rather than platform players, meaning that end-user organisations have to choose their partners wisely, then build and maintain development and management platforms themselves rather than using pre-integrated tools from a singe vendor.

None of this is a problem per se, but it does create overheads for adopters, even if they gain earlier benefits from adopting the Kubernetes model. The value of first-mover advantage has to be weighed against that of investing time and effort in the current state of tooling: as a travel company once told me, “we want to be the world’s best travel site, not the world’s best platform engineers.”

So, Kubernetes may be inevitable, but equally, it will become simpler, enabling organisations to apply the architecture to an increasingly broad set of scenarios. For organisations yet to make the step towards Kubernetes, now may still be a good time to run a proof of concept though in some ways, that sip has sailed perhaps focus the PoC on what it means for working practices and structures, rather than determining whether the concepts work at all.

Meanwhile and perhaps most importantly, now is a very good moment for organisations to look for what scenarios Kubernetes works best “out of the box”, working with providers and reviewing architectural patterns to deliver proven results against specific, high-value needs these are likely to be by industry and by the domain (I could dig into this, but did I mention that I’m sitting on a plane? ).

Jon Collins from Kubecon 2022

Kubernetes might be a done deal, but that doesn’t mean it should be adopted wholesale before some of the peripheral detail is ironed out.

The post Retrospective thoughts on Kubecon appeared first on GigaOm.

Continue Reading

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Defeating Distributed Denial of Service Attacks

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It seems like every day the news brings new stories of cyberattacks. Whether ransomware, malware, crippling viruses, or more frequently of late—distributed denial of service (DDoS) attacks. According to Infosec magazine, in the first half of 2020, there was a 151% increase in the number of DDoS attacks compared to the same period the previous year. That same report states experts predict as many as 15.4 million DDoS attacks within the next two years.

These attacks can be difficult to detect until it’s too late, and then they can be challenging to defend against. There are solutions available, but there is no one magic bullet. As Alastair Cooke points out in his recent “GigaOm Radar for DDoS Protection” report, there are different categories of DDoS attacks.

And different types of attacks require different types of defenses. You’ll want to adopt each of these three defense strategies against DDoS attacks to a certain degree, as attackers are never going to limit themselves to a single attack vector:

Network Defense: Attacks targeting the OS and network operate at either Layer 3 or Layer 4 of the OSI stack. These attacks don’t flood the servers with application requests but attempt to exhaust TCP/IP resources on the supporting infrastructure. DDoS protection solutions defending against network attacks identify the attack behavior and absorb it into the platform.

Application Defense: Other DDoS attacks target the actual website itself or the web server application by overwhelming the site with random data and wasting resources. DDoS protection against these attacks might handle SSL decryption with hardware-based cryptography and prevent invalid data from reaching web servers.

Defense by Scale: There have been massive DDoS attacks, and they show no signs of stopping. The key to successfully defending against a DDoS attack is to have a scalable platform capable of deflecting an attack led by a million bots with hundreds of gigabits per second of network throughput.

Table 1. Impact of Features on Metrics
[chart id=”1001387″ show=”table”]

DDoS attacks are growing more frequent and more powerful and sophisticated. Amazon reports mitigating a massive DDoS attack a couple of years ago in which peak traffic volume reached 2.3 Tbps. Deploying DDoS protection across the spectrum of attack vectors is no longer a “nice to have,” but a necessity.

In his report, Cooke concludes that “Any DDoS protection product is only part of an overall strategy, not a silver bullet for denial-of-service hazards.” Evaluate your organization and your needs, read more about each solution evaluated in the Radar report, and carefully match the right DDoS solutions to best suit your needs.

Learn More About the Reports: Gigaom Key Criteria for DDoS, and Gigaom Radar for DDoS

The post Defeating Distributed Denial of Service Attacks appeared first on GigaOm.

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