Summary: Google Cloud, BNY Mellon, and Visa have doubled down on the crypto industry in the last couple of weeks. Yet, it seems large corporations are not the only ones doubling down on crypto. This year is on track to be the most lucrative year for hackers targeting the crypto industry.
It has been an intense couple of weeks regarding the entry of large enterprises into crypto. On Tuesday, Google Cloud partnered with Coinbase to offer tools for developing decentralized applications and to receive crypto as payment from selected clients. On the same day, the Bank of New York Mellon (BNY Mellon) officially launched its long-awaited crypto custody product after receiving regulatory approval earlier this year. Last week, Visa announced that the company has formed a partnership with crypto exchange FTX to issue debit cards in 40 countries. When announcing the partnership, Visa CFO Vasant Prabhu stated that “even though values have come down there’s still steady interest in crypto”.
For crypto to mature, it is absolutely necessary that large enterprises within technology and finance offer various services within crypto - otherwise the space will never leave the basement with a handful of strong crypto advocates. So, although we are in a bear market, it is promising to see influential corporations deepening their commitment to the industry by launching crypto products likely to positively affect the industry over time.
2021 was not only the year of greater public interest in crypto and higher prices, but it was also the year of countless hacks of particularly decentralized protocols and bridges connecting various cryptocurrencies. Throughout 2021, over $3bn worth of crypto assets was stolen, according to Chainalysis. Yet, 2022 may surpass 2021 with around $3bn worth of crypto already stolen this year. This is mainly the result of October, in which crypto worth $718mn has been stolen so far. This amount makes October the biggest month this year in terms of value hacked barely 13 days into the month.
The value hacked is fairly contradictory to the general course of the crypto market this year. With the prices in free fall for much of the year alongside an exodus from decentralized protocols, it is shocking that hacks worth this much still occur. For instance, around $52.5bn is at the moment locked in decentralized protocols, whereas last year’s high was at around $182bn, meaning that the pool potentially exposed to hacks was significantly greater last year. Strictly speaking, this indicates that hacks are a growing issue, contributing to less trust in crypto from the general public, institutions, and regulators, highlighting the urge for greater security in decentralized protocols. Yet, it is important to mention that although centralized exchanges were successfully targeted for years by hackers, it rarely happens anymore, so the industry has demonstrated that it can manage security on that level. Next, it must show it with respect to decentralized applications.
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