How Did The 3 Big Crypto Hacks Happen?
Recently, there has been a lot of information surrounding the issue of vulnerabilities appearing on crypto exchanges; investment hacks are happening more and more. So let’s look at three shocking crypto hacks that happened to compare with current tricks that can help investors protect their assets.
Why Cryptocurrency Hacking Is Increasingly Popular
Cryptocurrencies are becoming increasingly popular these days, just like with Web2; cybercriminals are circling and looking to exploit Web3 for their financial gain.
Besides, despite being known and accepted, governments have not yet officially recognized cryptocurrencies and have specific laws to protect investors and this type of digital asset.
The cryptocurrency’s high value is also a significant reason it has become a target for hackers.
3 major crypto hacks
Mt.Gox (2011 and 2014)
It was often recognized as the first significant cryptocurrency hack. Mt. Gox was a Japanese crypto exchange launched in 2010. By 2011, it was one of the biggest global exchanges and handled more than 70% of all BTC (Bitcoin) transactions. However, it was at this time that the first exploit took place. $8.75 million of Bitcoin was stolen from the exchange in 2011. The first attack was seen as a lesson, and Mt Gox saw this as an opportunity to improve their security and code to prevent another attack.
Despite this, in 2014, a more explosive attack took place. Fraudsters managed to siphon $615 million worth of Bitcoin from the exchange, and they managed to do this by creating fake bitcoins and flooding the discussion with them.
Investigations since had also found that Mt Gox’s private key was stolen and decrypted back in 2011 when that first attack took place.
The resulting attacks left Mt Gox in financial ruin, and lawsuits have been ongoing to recover as much money for users as possible.
Binance has done a phenomenal job bringing Web2 users to the front of Web3, and its user-friendly interface has helped make them one of the most well-known exchanges in the crypto industry. On an individual level, it is the one business that seems recognized away from the industry.
The world’s largest cryptocurrency exchange boasts a portfolio of 394 different tokens and 1,668 active markets at the time of writing this. Due to the scale and enormity of their name and reputation, Binance’s exploit of 2019 made it onto our list.
In May 2019, hackers managed to exploit a Binance hot wallet and withdraw $40 million worth of Bitcoin. Fraudsters managed to gain access to the Binance security system, obtaining various data elements, including APIs and two-factor logins. All the stolen bitcoins were linked to just one specific wallet. Since the exploit, Binance has set up an insurance fund to try and cover the losses of its users.
The third attack to make it onto our list is CoinBene. Considered in 2019 as one of the top 10 cryptocurrency exchanges, the Singapore-based organization was unique in its failure to accept liability or even that an exploit took place in the first place.
CoinBene was active in 192 countries worldwide, and fraudsters managed to steal approximately $105 million in various tokens and currencies. This event took place in March 2019, and as a result, CoinBene refused to reveal the details and suggested they were closing down for various maintenance activities.
Since then, investigators have deduced that the exchange was actually exploited. Criminals took the money away from CoinBene and started trading on other major exchanges. As a result, none of the lost coins have been recovered.
These are just three of the hundreds of significant attacks that have taken place within the industry. In fact, in 2021, we entered the biggest year of crypto cybercrime. It is believed that last year, $14 billion was stolen from the industry, and very little, if any, has been recovered by their rightful owners.
It is not time to sit back and allow this to happen. It is time to be aware, be stringent with the protection of assets, and investigate alternative protection options such as insurance solutions. The best place to start is by browsing which solution is right for you.
The most common insurance offering available right now is smart contract vulnerability. Depending on the terms and conditions of the provider, this insurance would usually protect you against any attacks on the smart contract of the protocol that you keep your assets in.
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