# kaal:claim:3936876-014

**Claim.** Because a wallet provider or exchange that has custody of a digital asset gains full control over transactions, hacking a digital asset exchange is equivalent to robbing a bank: the attacker obtains valuable cryptocurrency that can be cashed out.

**Type.** mechanism  **Support.** argued

**Holds when.**

- exchanges holding pooled customer assets in hot storage

**Source quote.**

> As such, a hack of a digital asset exchange is akin to robbing a bank-- getting hold of valuable cryptocurrencies that they can cash out of.

**From.** Wulf A. Kaal, Hayley Howe, *Custody of Digital Assets* (2021), II.2.a Hot Storage, page 17

**Cite as.** Wulf A. Kaal, Hayley Howe, Custody of Digital Assets (2021). SSRN: https://ssrn.com/abstract=3936876

**Verify.** sha256 of source PDF `9bc0903d01910460298e754c451f027df4324367359800a98ee8e638d94aff55` at https://raw.githubusercontent.com/wulfkaal/Academic-Papers/main/papers/pdf/Kaal%20and%20Howe%20-%202021%20-%20Custody%20of%20Digital%20Assets.pdf

**Failure mode.** exchange honeypot  (family: custody-and-key-loss)

**Topics.** defi, risk-and-incentives, consensus-and-security

**Keywords.** exchange-hacks, honeypot-risk, custody, cybersecurity

**Canonical form.** This markdown file is the canonical hashed representation of the claim. Its sha256 is the content hash used for attestation.