In light of the recent $1.4B Bybit security breach, the cryptocurrency community has been reminded once again of the critical importance of exchange security. As digital assets become increasingly valuable targets for sophisticated attackers, the challenge of protecting user funds has never been more complex or crucial. At JuCoin, we’ve always maintained that security is the foundation upon which everything else is built. In this article, we’ll share an inside look at how JuCoin approaches the challenge of building and maintaining a fortress-like security system for our centralized exchange.
Core Security Principles
At the heart of JuCoin’s security framework lies six interconnected principles that guide every decision we make:
- Deep Defense: Multi-layered security across all levels (network, system, data, application) creates redundancy and increases attacker difficulty.
- Least Privilege: Strict permission controls minimize risks from privilege abuse.
- 24/7 Monitoring & Incident Response: Real-time monitoring and a rapid response team ensure swift incident management.
- Security Audit & Pen Testing: Regular audits and penetration tests proactively identify and fix vulnerabilities.
- Compliance & Regulation: Global licensing and regulatory adherence build trust and protect users.
- User Security Education: Ongoing education empowers users to enhance their own security.
These principles don’t operate in isolation, rather they form an integrated security ecosystem where each element reinforces the others. For instance, our deep defense strategy works hand in hand with our monitoring systems, while our audit processes inform our educational initiatives, creating a comprehensive security framework that’s greater than the sum of its parts. This holistic approach has proven essential in maintaining our track record of security, even as threats in the cryptocurrency space become increasingly sophisticated.
Key Security Technologies and Practices
Having strong security principles is only part of the equation, their implementation must be equally robust. We’ve invested heavily in cutting-edge technologies and rigorous practices that transform our security principles into reality.
AI-Powered Threat Detection
Real-time monitoring, behavioral analysis, and threat intelligence integration (AlienVault OTX) for proactive threat identification. Enterprise-grade IDS/IPS (Fortinet) protects against network attacks.
Rigorous Smart Contract Audits
Comprehensive audits by firms, vulnerability scanning, and formal verification (Isabelle/HOL) ensure smart contract integrity. Continuous monitoring and collaboration with security firms like PeckShield.
Multi-signature Wallets for Asset Security
Multi-sig technology prevents single-point compromise. Keys are secured offline in HSMs, managed globally under ISO27001 standards with strict procedures and multi-level approvals.
Cold & Hot Wallet Segregation
Over 99% of assets in offline cold wallets with 24/7 monitoring. Hot wallets (<1% for operations) are multi-sig protected with strict access controls. Bank-grade fund transfer procedures and independent audits ensure accountability.
Lessons from Past CEX Hacks
The cryptocurrency industry’s journey has been marked by several significant security incidents that have shaped how we approach exchange security today. Each major hack has revealed critical vulnerabilities and taught valuable lessons that continue to influence security practices across the industry.
The story begins with Mt.Gox, once the world’s largest Bitcoin exchange, whose collapse in 2014 became a watershed moment for cryptocurrency security. The incident highlighted fundamental weaknesses in private key management and the critical importance of regular security patches.
Subsequent incidents continued to expose new vulnerabilities. Coincheck’s 2018 breach taught the vital importance of cold wallet storage and multi-signature security, while Binance’s 2019 incident revealed the often-overlooked risks in API security management. The 2020 KuCoin hack brought attention to a different threat vector altogether: the security of internal systems and supply chain vulnerabilities.
The Recent Bybit Incident
However, it’s the recent Bybit theft in February 2025 that has sent shockwaves through the industry, showing that even modern security systems can be compromised by sophisticated attackers. The $1.4 billion theft, believed to be orchestrated by the notorious Lazarus Group, serves as a sobering reminder that security is an ongoing challenge that requires constant vigilance.
The attack unfolded in several stages:
- Initial Breach (February 19, 2025): APT infiltration and malware deployment, establishing long-term system access
- Strategic Preparation (February 21): Targeted replacement of multi-signature contracts
- Asset Theft (February 21): Exploitation of compromised keys and contract backdoors
- Crisis Management: Swift industry response helping to mitigate the liquidity crisis
Critical Lessons from the Bybit Incident
The Bybit attack has reinforced several crucial security principles while revealing new areas of concern. Perhaps most significantly, it demonstrated that sophisticated technology alone isn’t enough. The most advanced security systems can be undermined by lapses in procedures, permissions, or awareness.
The incident has also highlighted the growing threat of Advanced Persistent Threats (APTs) in the space. These attacks require a new level of defense, including:
- Advanced threat detection systems utilizing UEBA and AI-driven analysis
- Specialized security teams trained in APT detection and response
- Regular security drills and simulations
Moreover, the complexity of multi-signature systems, while providing excellent security when properly implemented, requires meticulous attention to detail in both setup and maintenance. This incident has shown that the management of these systems must be treated with the same level of care as the technology itself.
Perhaps most importantly, the Bybit incident has reinforced that insider risk remains one of the most significant threats to exchange security. This understanding has led to a renewed focus on internal controls, comprehensive staff training, and the cultivation of a strong security culture within organizations.
JuCoin’s Security Enhancement Plan
In response to the lessons offered by this incident, we’re implementing targeted security enhancements across five key areas where the attack revealed potential weaknesses.
Advanced Threat Detection
Our first line of defense against APT attacks is being strengthened through AI/ML integration for advanced threat modeling and upgraded SIEM systems providing minute-level incident response. We’re also deploying UEBA technology specifically to catch the kind of insider threats and account anomalies that preceded the Bybit breach.
Smart Contract Protection
Since the Bybit attack leveraged compromised smart contracts, we’re enhancing our audit processes with stricter standards including 100% code coverage requirements and multi-party verification. A new rapid hotfix system ensures we can respond to smart contract vulnerabilities within hours, not days.
Multi-signature Security
We’re implementing next-generation HSMs with enhanced physical security and global key sharding to prevent the kind of key compromise that affected Bybit. Our new triple authentication system combines biometric, hardware, and location-based verification to create multiple layers of protection.
Wallet System Improvements
Learning from Bybit’s experience, we’re introducing AI-driven dynamic balancing between hot and hot wallets, along with automated transfer systems that reduce manual handling risks. Our new multi-layered defense system provides coordinated protection across all wallet types.
Industry Leadership
Beyond our own platform, we’re actively working to raise industry standards by advocating for standardized multi-signature protocols and sharing security insights with other exchanges. We believe that collaboration is crucial for preventing future attacks of this magnitude.
User Asset Protection Is a JuCoin Priority
The cryptocurrency landscape continues to evolve, and with it, the sophistication of potential threats. At JuCoin, we understand that our users’ trust is earned through action, not words. By learning from industry incidents, continuously enhancing our defenses, and maintaining transparency with our community, we’re protecting assets while helping build a more secure and trusted future for cryptocurrency trading. This is our promise to every user who chooses JuCoin as their trading partner.
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