Cryptocurrency is well-known for its transparency. Unfortunately, cybercriminals are targeting crypto platforms and exchanges these days to exploit them. The exchanges invest a great deal of money to protect their assets, still breaching the security measures is not difficult for experienced attackers.
This article will focus on the10 crypto exchange hacking in history. As you will find some prominent names in the list, it will become evident to you that the companies need to apply more security measures to tackle highly sophisticated illicit activities.
10 Worst Cryptocurrency Hacking Incidents Ever Happened
1. Ronin Network (2022)
If you consider the value of the crypto assets at the time of the theft, the biggest cryptocurrency hacking took place in March 2022. Ronin Network was the unfortunate victim of the incident. This exchange allows Axie Infinity players to exchange in-game tokens for other cryptocurrencies.
According to the company, attackers transferred 173,600 Ethereum and 25.5m USDC to their wallets by stealing the private keys needed for transaction authentication. The value of the stolen assets was $614 million.
2. Maiar (2022)
In June 2022, a decentralized crypto exchange called Maiar warned its users of some suspicious activities on its Elrond blockchain. Just after that, an independent researcher disclosed that hackers extract 1,650,000 Elrond eGold (EGLD) through a security flaw in the platform.
The internal currency of the blockchain was worth $113m at the time of the incident. After the breach, the company recovered the stolen funds and fixed the bug to improve security.
3. Poly Network (2021)
In August 2021, tokens worth $611 million of Poly Network got transferred to three wallets under the control of the hackers. Poly Network is a smart contract platform where users can exchange tokens between disparate blockchains like Bitcoin and Ethereum.
Surprisingly, the hackers started to return the stolen fun the very next day of stealing. Many assume they struggled to sell the stolen assets, but attackers claimed they did the heist for fun.
4. KuCoin (2020)
KuCoin disclosed in September 2020 that it lost cryptocurrencies worth $275 million because of the hacking incident. The lost funds of this Singapore-headquartered crypto exchange include $127 million in ERC20 tokens, primarily used in Ethereum smart contracts.
The CEO of KuCoin also revealed that the heist was possible after the hackers accessed the hot wallets of the exchange through the private keys.
5. Coincheck (2018)
Coincheck is a Japanese crypto exchange that revealed in 2018 that it lost $547 million through a lesser-known cryptocurrency named NEM. The exchanges also admitted that they stored the assets in hot wallets. Since these wallets had an internet connection, it made them vulnerable to cybersecurity threats.
During the attack, Coincheck was a high-profile exchange in Japan, one of the biggest crypto trading markets. More than 30 people got arrested in Japan in connection with this theft. However, the identity of the hackers is still unknown.
6. BitGrail (2018)
In June 2017, BitGrail fell victim to another crypto heist. Though it was a comparatively smaller Italian crypto exchange, the hackers stole $170 million in niche cryptocurrency Nano. Being unable to repay the users, the exchange closed down. Later, an Italian court found the company’s CEO was to blame for its lack of security.
7. Zaif (2018)
Zaif is a crypto exchange based in Japan. In 2018, it became the target of hackers and lost cryptocurrency worth $60 million at that time. The hackers stole Bitcoin, Bitcoin Cash, and Monacoin from the crypto wallets named “hot wallets.” These wallets have lighter security measures to ensure immediate transactions.
While most of the stolen funds belonged to the customers, 32% of the funds were part of the reserve of the crypto exchange. However, the company immediately refunded its customers.
8. NiceHash (2017)
Hackers infiltrated the NiceHash payment system to capture the Bitcoin worth $64 million. The cryptocurrency mining marketplace suffered from a security breach and lost 4.700 Bitcoin. The company CEO claimed it to be the largest crypto theft in the history of Ukraine that badly affected the platform.
Later, a Los Angels court issued an indictment for three hackers. By December 2020, the company completed refunding all its clients after continuing to pay back from its profit for three years.
9. Bitfinex (2016)
In 2016, Bitfinex saw a theft of 120,000 Bitcoin, which was worth $72 million at the time. The Hong Kong-based crypto exchange witnessed the proceeds of 2,000 transactions into a wallet that the hackers controlled.
As a result, the value of Bitcoin was down by 20%. The US Department of Justice recently announced that it seized the fund from the heist. Currently, the worth of the stolen money is $3.6 billion due to the rocketing value of Bitcoin.
10. Mt. Gox (2014)
You may already know of the hacking incident of the Japanese exchange, Mt. Gox. The crypto heist of $480m in Bitcoin was not only the best-known incident but also the first widely publicized incident.
In this incident, hackers stole 850,000 Bitcoins from this platform. It was about 7% of all Bitcoins that were in circulation at that time. A US investigation revealed in 2016 that the attacker was an outsider, through the CEO of Mt. Gox was arrested and interrogated initially.
How to Know if It Is a Cryptocurrency Scam or Not
You may notice that dozens of new cryptocurrencies start their operations each month. As a cryptocurrency investor, this might look like a promising situation. However, not all cryptocurrencies are authentic.
Even experienced investors often find it difficult to distinguish between a legitimate Crypto project and a scam. The followings are some common tips on how to know a crypto scam.
1. Promises of Guaranteed and Unrealistic Returns
If a cryptocurrency offers a 1000% return in just one year, you should take it with a pinch of salt. No matter how amazing the offer is, you need to understand how realistic it is. Remember that the fraudsters lure you to spend money on their scams by making hyped promises of returns.
Also, no one can guarantee a particular amount of returns from a volatile currency. If you find someone who is making such claims, it will be wise to stay away from such schemes.
2. Excessive Marketing and Promotions
Heavy marketing is another way cryptocurrency fraudsters attract people into their shady projects. As a newcomer in a market, you can expect these cryptocurrencies to advertise to make people aware of their products. However, too much marketing can be suspicious.
A legitimate ICO will grow naturally over time, while scams will opt for quick modes of raising money, such as full-page newspaper advertisements, huge website ads, and paid influencers. So, use your judgment to find out the legit ones.
3. Check Out the Whitepaper
The cryptocurrency whitepaper is an integral part of any initial coin offering (ICO). It covers important topics like project design, growth plan, and business model. If any cryptocurrency does not have a whitepaper, you can forget about investing in it.
If you find one, read it thoroughly to understand. If it does not make any sense, it is probably because the founders are trying to confuse you to invest in their fake product.
4. Unnamed or Non-Existent Team Members
Like other ordinary businesses or investments, you should also easily know about the masterminds of a cryptocurrency, including the team members. You should be able to research them and find out their background. Also, you can find them on social platforms, check how old their profiles are, and know how many followers they have and whom they follow.
Even if this sounds hectic, you should do this before investing in ICO. If you can not find the developers on any social media, or see the CEO profile was created only a week ago, stay away from it.
5. No Published Code
The code is essential for a cryptocurrency to work without any issue. Most legitimate cryptocurrencies will have open-source code. As these are published openly, anyone can read them. If any team keeps the code secret, you have enough reasons to be suspicious.
6. Demanding Crypto-Only Payments
If an apparently credible person or company claims they only accept payments in the form of cryptocurrency, it is probably a scam. Bitcoin and similar coins are a burgeoning asset class, so no reliable institutions will accept crypto but not also accept USD via wire transfers, checks, cash, and other means.
Probably, those people are trying to trick you into paying them into Bitcoins and capitalizing on their value before they run away with the money.
This article discussed some of the worst cryptocurrency hacking incidents in history. As you can understand, robust security walls are insufficient against experienced cyber criminals.
Therefore, crypto exchanges and firms should keep a keen eye on unauthorized activities. Now that you know how to locate a crypto scam, follow our tips to protect yourself against such hacking incidents.
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