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Crypto Under Attack: 5 Worst Hacks That shook the Crypto World

The world of cryptocurrencies looks tempting, but it comes with risk, and the person involved should be careful about those. One wrong link or click can cause damage to the user’s system and investments. Let’s look at some of the top cryptocurrency hacks of all time.

Written by Heena Vinayak Published on

Over the years, we have seen considerable changes in the technological world, and they have been remarkable. The world was brought closer with the help of the internet, and it improved everyone’s day to day life. But as they say, every good thing always comes with a downside too; the same is the case with the improved technology and the internet.

Let’s look at the hacking part of the internet where a single person or a group of people together decide to do unlawful activities and try to gain unauthorized access to someone’s system. Anyone using the internet is prone to hacking, and these hacks can vary from corruption and manipulation of user files and computer systems to stealing users’ browsing history as well as their funds from crypto wallets.

These hackers have started being creative with how they plan these hacks and implement the plan. The process of hacking takes time, effort, and patience. Hackers have grown stronger with the development of technology as it has opened new ways for them to attack users and big exchanges.

Let’s look at some of the most significant crypto hacks of all time:

1. $460 million hack that destroyed Mt. Gox

The first-ever crypto hack that killed one of the biggest names in the business was the Mt. Gox hack. This hack changed the fate of the biggest exchange in the world. The exchange in the days of its glory was handling 70% of the world’s Bitcoin exchange.

The Japan-based exchange has been attacked twice since 2010. The first attack took place in 2011 when a hacker was able to lay his hands on the auditor’s credentials, and using that; he transferred Bitcoins to an untraceable address. This hack caused a dent on the reputation of the exchange, and they suspended their operations for a while.

Note: The head of Mt. Gox was charged for fraud and went on trial in July. He was facing prison for five years. After this hack, the policies and rules in Japan were updated for cryptocurrencies.

Again in 2014, the exchange was attacked for the second time, and this time, it was the end of them. The exchange lost 850,000 Bitcoins valued at $460 million at the time of theft. After this, the company filed for bankruptcy, and they had to end their operations.

2. Bitfinex loses $72 million worth of Bitcoins to a hacker

Bitfinex is one of the largest Bitcoin exchanges in the world, and it has been around for users since 2012. In the seven years long career they’ve had, the exchange was attacked multiple times, and since then, they have been facing issues with healthy banking relationships.

The first hack took place in 2015 when the customers of the exchange lost $400,000. Followed by this, another hack took place in 2016 when the exchange lost 119,756 Bitcoins worth almost $72 million. The attacker took advantage of a vulnerability in the multi-signature system.

Note: Bitfinex structured the accounts like the wallet service provider BitGo. BitGo was said to have a single secret key, whereas Bitfinex has two secret keys.

The exchange was unable to understand how the system was breached or how the hackers were able to pass through the multi-signature system making this hack one of the biggest hacks of the time.

3. Binance loses $40 million and user data to hackers

Binance is one of the best-known cryptocurrency exchanges in the world and recently, in a security breach, lost Bitcoins worth $40 million, and along with that, hackers also stole some users 2FA code and API tokens.

In the first few months of 2019, hackers stole $356 million from various exchanges. Binance has been open about this hack and explained how hackers used multiple techniques to carry out the hack. The CEO also mentioned how the hackers took time to pull off this task.

Note: The company has no clue who carried out the hack, but they will compensate for losses with the help of its Secure Asset Fund for Users.

Zhao Changpeng mentioned how hackers carried out the hack in a sophisticated way as they attacked multiple independent accounts. The transaction of the hack was structured in such a way that it passed the security checks of the exchange.

4. Bittrex loses $18 million after a series of hacks involving Bitcoin Gold

Bittrex has decided to delist Bitcoin Gold from their platform after a series of hack that took place led to the exchange losing $18 million. The hackers carried out this hack by taking over the Bitcoin Gold market and controlling 51% of the hash power.

This hack brought the number of Bitcoin Golds stolen to 388,000. The hack was carried out by using the Double spending method where the hackers tricked the exchange into transferring double the coins that were needed. Bittrex later requested for a compensation of 12,000 BTG($255,000) for the loss that the exchange had to face.

BTG worth $3 million was stolen from the exchanges after hackers tricked people into downloading fake wallets. These hacks have damaged the BTG’s reputation as the crypto assets have declined in the crypto market.

5. Coincheck gets attacked and loses 500 million NEM

The Japanese crypto exchange, Coincheck, lost about 500 million NEM worth $532 million in 2018 in a hack that was carried out from Russia. The hackers released malware in the employee’s laptops from where they exploited the system vulnerabilities.

This is considered as one of the biggest hacks in the crypto industry, including such a massive amount of cryptocurrency being stolen. The fiat value of the currency stolen was very high, as well. Coincheck was affected by the hack, but it was able to recover from the losses and gained the customer’s trust again.

Note: After the hack, a lot of things surfaced during the investigation like it was not known that Coincheck was not registered with Japan’s FSA.

The exchange refunded the stolen amount to the 260,000 affected users. The NEM developers tagged all the NEM funds that were stolen in the hack as stolen so that no other exchange would accept them.

Conclusion

The cryptocurrencies market is growing at a fast pace as more people are moving towards investments, and various cryptocurrencies and exchanges are also being launched. The best way to do that is by staying updated with the latest news in the cryptocurrency & blockchain world. You should regularly read the news on cryptocurrency, Tron news, Bitcoin Ethereum, and other altcoins. Before investments, one should be careful about the risks involved, and they should choose the right platforms for trading.

Written by

Heena Vinayak is the Founder of KillerLaunch, a company that helps startups & companies find catchy, killer domain names.

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