The recent data blackout CrowdStrike experienced has raised questions about its potential impact on various industries, including cryptocurrency firms. Blockchain researcher and ex-CEO of Naijacrypto Chiagozie Iwu provided insights into how the disruption could have affected crypto companies and offered recommendations to mitigate associated risks.
Speaking with Cointelegraph, Iwu pointed out that blockchain-native companies, which operate on decentralized networks, are inherently more resilient to such disruptions. “For blockchain-native companies, they have nothing to worry about as the elements of node-based decentralization mitigate this risk,” he said.
Vulnerable to future issues
However, he cautioned that centralized crypto platforms could be vulnerable to similar issues in the future. He suggested that institutions might start considering decentralized cloud-based architectures, like those of the internet Computer (Dfinity), to bolster their resilience.
Olumide Adesina, an analyst at Quantum Economics, stated that the incident also buttressed the viability of blockchain as an alternative to conventional IT systems.
Addressing potential regulatory challenges stemming from the CrowdStrike blackout, Iwu was skeptical about immediate large-scale regulatory changes. He believes the recent cybersecurity incident is unlikely to lead to major regulatory changes, as it is not significant enough to warrant such a response.
According to Iwu, existing regulations, data backup, and handling requirements have already addressed cybersecurity issues, reducing the need for new regulatory changes.
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However, a significant concern is the potential impact on crypto firms’ trading activities and revenue streams. Iwu highlighted the risks, noting that financial losses could result from missed trades or improperly netted financial situations.
Mitigating risks
To mitigate risks associated with the CrowdStrike data blackout, Iwu advised crypto firms to consider alternative endpoint security solutions to CrowdStrike and implement additional security layers.
While pointing out that despite the decentralized nature of cryptocurrencies, centralized dependencies remain, necessitating robust disaster recovery plans and frequent backups, Iwu advised isolating critical systems and data to avoid being affected by the less secure parts of the network.
Microsoft dealt with a widespread Windows system outage, which had a ripple effect on various critical services globally. The affected services include emergency response, financial institutions, airports, and broadcasters. However, CrowdStrike’s cybersecurity software seems to be the root cause of the issue.
CrowdStrike CEO George Kurtz said on July 19 that the company is attempting to resolve the issue and get businesses back online.
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