Cryptocurrency has gained immense popularity since its inception, and it has become a prime target for hackers. As digital currencies gain more attention from investors across the globe, cybercriminals are also increasingly targeting them for illicit activities. This article will discuss some of the most devastating crypto hacks to date and provide tips on how to protect yourself from similar attacks in the future.
Ronin Network – $595M
The largest cryptocurrency theft to date occurred when hackers hacked Ronin, a gaming-based crypto network, for an astounding $620 million. Composed of 173,600 ETH (roughly $595 million) worth of digital currency and USD tokens worth an additional 25.5 million dollars, the hacker accessed the wallet using private keys.
To help resolve the issue, Ronin has contacted law enforcement and is working towards recovering stolen funds. As one of the most popular play-to-earn games out there, Axie Infinity takes great pride in its security protocols — but this unfortunate incident serves as a reminder that we must do more to protect from malicious attacks.
Although it happened early in 2022, it should go down as a cautionary tale for anyone considering investing in cryptocurrencies.
Poly Network – $610M
The Poly Network suffered a significant attack worth $610 million in August 2021, resulting in the theft of large amounts of personal data. Hackers infiltrated the network through a series of sophisticated and carefully planned tactics.
Social engineering was used to gain access to user accounts, as well as to exploit known vulnerabilities in the system. In response to the breach, Poly Network implemented upgraded security measures to ensure that their customer data remained secure always.
As a result, the company is confident that their users’ data remains safe, and it is business as usual for all concerned.
Coincheck – $534M
In January 2018, the Japanese crypto exchange Coincheck sent shockwaves through the cryptocurrency industry following news of a major hack where thieves stole over 500 million NEM tokens (XEM), valued at approximately $534 million dollars.
The attack, one of the largest hacks in cryptocurrency history, resulted in a vast number of stolen funds and exposed security vulnerabilities present in many other cryptocurrency exchanges. Fortunately for victims, the NEM Foundation tracked down the stolen currency to prevent its usage elsewhere.
As of right now, investigations into the attack have not concluded, leaving many to question how something like this could have happened.
MT. Gox – $450M
The Mt. Gox hack of February 2017 was one of the most notorious incidents in the history of cryptocurrency, as it resulted in a major disruption to the Bitcoin market and a loss of over $450 million worth of coins.
The scale of the attack took many by surprise and even caused about 20% downturn in Bitcoin exchange rates around the world. There were reports that this attack had been several years in the making, because of security flaws that were accepted or overlooked by Mt. Gox’s management before finally being exploited by hackers. Since that fateful event, there has been a wealth of security advancements in place to protect exchanges against such attacks and help mitigate their effects when they occur.
Upbit Wormhole hack – $320M
In February 2022, a massive hack occurred on the South Korean cryptocurrency exchange Upbit, resulting in an estimated $320 million stolen from user accounts.
The hackers initially targeted a wormhole in the exchange’s system to take advantage of encrypted wallets; however, experts believe that because of Upbit’s sophisticated security protocols, they forced the hackers to use a phishing scam to gain access to user information and private keys.
The hack was one of the largest crypto heists and has left many exchanges on high alert, increasing their security measures to prevent similar attacks from happening. It serves as a reminder that, while we may see digital currencies as anonymous and secure forms of payment, they remain vulnerable to malicious activities.
KuCoin – $45M
The Kucoin hack, which occurred in September 2020, was one of the largest cryptocurrency heists in history. This incident resulted in the theft of approximately $45 million worth of digital currency from users’ accounts.
Despite a recovery effort that has returned 84% of the stolen funds back to its original owners, roughly $285 million remains unaccounted for. It is important to note that this is not an isolated event and that other cryptocurrency exchanges are vulnerable to similar threats because of their semi-anonymous nature and lack of government regulation.
It is essential for merchants and investors alike to take extra precautionary measures in order to stay safe when dealing with digital currencies.
PancakeBunny
In May 2021, an alarming event occurred on the Binance exchange platform. In a flash loan attack, a malicious actor borrowed a substantial amount of Binance Coin (BNB) and manipulated its price by dumping it all onto the BUNNY/BNB market.
The resulting chaos was astounding: in just 30 minutes, the price of BUNNY shot from $150 to $240 before plummeting back down to $0. Fortunately, no money or cryptocurrency got lost because of quick action by the exchange’s security protocols and risk management teams.
Despite this, such an attack still reflects badly on crypto exchanges, as it shows how easy it can be for unethical actors to interfere with trading activities and cause chaos in a matter of minutes.
Bitmart – $196 M
Bitmart, a cryptocurrency exchange, was recently the victim of a hacking incident that resulted in the theft of an unprecedented $196 million dollars. Despite efforts to retrieve the stolen funds, most of them remain unaccounted for, and many victims still await justice and the return of their misappropriated assets.
Analysts have linked the heist to a vulnerability found in the hot wallet system of Bitmart’s network, making it easily penetrable for the hacker who retrieved a mint of tokenized assets such as Binance Coin (BNB), Safemoon, and BNBPay.
Although this terrifying attack may seem clear-cut at first glance, many national security agencies around the globe employ teams to investigate further into darker crevices in order to uncover those responsible for this malicious act.
Beanstalk – $80M
On April 2022, Beanstalk’s DeFi-based project was the victim of a flash loan attack where a hacker leveraged the platform’s majority vote governance system to exploit to their advantage.
Subsequently, the hacker fled with an astounding $80 million while losses on the platform totaled over $182 million. However, amidst all this chaos, news reports state that the hacker donated some of the money from the heist to Ukraine’s crypto donation wallet, showing that despite the criminal activity, even hackers can have some altruistic behavior.
This terrifying yet oddly heartwarming hack is certainly a reminder for users that cryptocurrency is still very much in its nascent stages and we must address weak points before allowing the public to invest its funds into any cryptocurrency project.
Bitgrail – $17M
In April 2018, BitGrail, a small Italian exchange trading in lesser-known Nano (XRB) tokens, suffered a major hack, as hackers stole at least 17 million tokens.
Investigations into the incident suggested the heist was an inside job, amounting to a staggering $150 million. Also, worrying is that it occurred via wallets kept in cold storage – investors’ wallets kept offline and considered much harder to breach. With this event serving as yet another warning to those trading online, greater security measures need to be taken by exchanges to protect investors from having their hard-earned money stolen.
Factors to consider before investing in a crypto project
Before investing in any crypto project, investors should consider the following factors:
1. Security: Exchanges must have a high level of security against cyberattacks and other malicious activities. They should also comply with relevant industry regulations, such as the EU’s GDPR, to protect customer data.
2. Transparency: The exchange must be transparent about its operations and provide adequate documentation for trading activities. This includes providing details on fees, token listings, and liquidity information.
3. History: Investors should research the history of an exchange before investing, looking at past performance and user sentiment to ensure it is reliable and trustworthy.
4. Reputation: Crypto exchanges should have an excellent reputation within the community for providing trustworthy services. This includes having a good customer service record and responding to any issues or inquiries users may have.
5. Technology: Exchanges should be up-to-date with the latest technologies, such as blockchain, encryption, and AI, to ensure their network is secure from external threats.
6. Liquidity: Investors should check an exchange’s liquidity before investing in crypto projects, as this will help ensure that they can convert their assets into cash quickly if needed.
7. Rate of Return: Finally, investors should also assess the rate of return that an exchange provides compared to other exchanges and projects on the market before making a final decision on where to invest their funds.
Conclusion
Cryptocurrency is still a novel asset class, and it is important for investors to exercise caution when investing in any crypto project. By considering the factors outlined above, investors can better ensure that they do not expose their funds to unnecessary risks.
Investigative efforts by international security agencies help keep the crypto space safe from malicious actors and potential financial losses.
Source: https://www.cryptopolitan.com/top-10-crypto-hacks-how-to-avoid-recurrence/