Cryptocurrencies are booming in today’s market. They are becoming a hot topic among several tech enthusiasts across the globe. As the volumes of capitals are increasing for cryptocurrencies, they are becoming an excellent target for hackers. Hackers have always been around industries where the money is continuously flowing, and the world of cryptocurrencies is not an exception. In this article, we will be looking at some of the largest cryptocurrency hacks ever. All these cyber crimes have been performed on some of the notable cryptocurrency exchanges around the world.
What Are Cryptocurrencies And How Does Cryptocurrency Works
Before going through some famous hacks in the world of cryptos, it is crucial to know what are cryptocurrencies and how does cryptocurrency works. Cryptocurrencies are digital assets that are used to exchange goods and services between buyers and sellers on a decentralized network. This decentralized network on which cryptocurrency works is called a blockchain. Blockchain ensures that transactions made through cryptocurrencies could be recorded on the systems within the entire network.
List Of 7 Largest Cryptocurrency Hacks Ever
This is considered as one among the most popular cryptocurrency hacks ever. This hack occurred in 2018. About 26000 investors lost their funds in this fraud and the total loss estimated was around $538.4 million. The company stopped all its trading activities and ensured to refund the investors who lost their wealth.
2. Mt. Gox
This fraud occurred in 2014 when Mt. Gox suspended all the transaction after it recorded a theft which stole about $460 million. All the fraudulent transactions managed to waste the wealth because Mt. Gox was going through various technical issues at that time. After the incident, several lawsuits were filed against the company. Another reason for this financial loss was a combination of bad management and a careless attitude.
BitGrail, an exchange from Italy, announced in 2018 that it had lost a wealth of about $195 million. The company was planning to raise funds for its cryptocurrency ‘Bitgrail Shares’ whose ownership was attributed to its customers. After the loss, the Court of Florence confirmed the firm’s bankruptcy through a double sentence.
Bitfinex has been the most popular exchange in accepting deposits in US dollar. In 2016, the exchange declared bankruptcy which drained an estimated wealth of about $72 million. The hack was successful in stealing 119,756 Bitcoins from the exchange platform. Later, Bitfinex aimed to recover the losses with the help of its payment token called BFX.
Zaif is a cryptocurrency exchange platform from Korea which recorded a loss of $60 million in 2018. The firm was utilizing a hot wallet(crypto wallet with less rigid security measures) instead of cold wallet (crypto wallet with multiple authentications) for the security of cryptocurrencies. The hacker manipulated this security vulnerability and drained out Bitcoin, MonaCoin and Bitcoin Cash.
In 2017, NiceHash encountered a hacker attack, which drained a wealth of about $60 million. About 4736 Bitcoins were stolen from the accounts of the exchange. However, NiceHash was somehow able to recover about 60% of Bitcoins that were stolen during the attack.
Bithumb, which comes at sixth position among top cryptocurrency exchange platforms, suffered a loss of $31.5 million through theft in 2018. This resulted in the suspension of activities related to trading and reduction in prices of the main cryptocurrencies. Despite suffering a major loss, the exchange never declared itself as bankrupt and successfully regained its position after some time.
Could Cryptocurrency Hacks Be Prevented
So far, we have seen that these cryptocurrency exchange platforms became the victim of some of the most powerful thefts and frauds. At present, there is no reliable solution against such financial crimes. The world of cryptocurrencies is something that is recent to the world where we actually exist. However, some security measures could be taken to prevent such attacks. They are as follows:.
- Time to time updation of crypto security software.
- Consistent research and analysis from the crypto community.
- Modifying the existing software for security purposes.
- Monitoring all the trading activities to find out any unusual or fraudulent one.
- Taking help from cybersecurity firms.
- Using some advanced end-to-end encryption techniques.
In this article, we have seen some of the largest cryptocurrency hacks ever. All these cyberattacks have drained a significant amount of wealth gathered by exchanges for growth and development of their business. As cryptocurrencies are new to this world, lots of research and analysis have to be done for their protection and security. Some advanced modifications on the blockchain could also help with security purposes. Cybercrimes always come with new modifications to get the existing security systems on their knees. However, with some more advanced security measures and ignorance of a reckless attitude, such financial crimes related to cryptocurrencies could be prevented and tackled in the coming years.
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