I was in the middle of a meeting yesterday evening when my colleague and co-author Annie alerted me to some erratic activity on cryptocurrency exchange Coincheck. The exchange was freezing transfers, and a gaggle of reporters were gathering in front of Coincheck’s Tokyo headquarters.

Apparently, one of Japan’s largest cryptocurrency exchanges has been hacked. The situation is still evolving in real-time with the local Japanese press providing play by play coverage, so I refer you to them for the latest updates.

This incident reinforces what many experienced crypto traders have been cautioning for a while: don’t keep your crypto assets on the exchanges. Or at least not the bulk of them. Store them safely in a hardware, software, or even paper wallet.

Furthermore, this hack underscores how nascent the blockchain infrastructure still is. Centralized exchanges possess vulnerabilities inherent in the architecture of single choke points and opacity. It is my expectation, and I’m aware of a handful of projects working on this, that we will soon evolve to an Exchange 2.0 model which provides greater transparency, accountability, and safety guarantees.