The most infamous crypto exchange hacks that shocked everyone

In the last few years, crypto currency has emerged as a favorite choice for the investors looking for newer areas and the results are definitely encouraging. From celebrities to the top business tycoons, the number of crypto investors is only going up with time. However, it would be a mistake to think that the crypto exchanges are immune to threats and hacking exploits. After 2011 till now, several instances of crypto exchange hacks have taken place and those incidents have sent shock waves in the industry. Shocking as it may sound, over 980,000 Bitcoins got hacked in these years from these crypto exchanges. Some of these hacked exchanges closed down afterwards while the others still operate.

How the crypto exchange hacks take place

So far, the recorded crypto exchange hacking exploits took place in a number of ways. Most of the times, the masterminds behind such stacks targeted the loopholes in the security system of the exchanges and the software. However, sometimes the employees of these exchanges were also targeted. The hot wallets of such exchanges were targeted in more than 80% of such attacks. Instances of a few phishing attacks and email based malware were also found.

Listed below are some of the biggest and scariest crypto exchange hacks that shook the sector:

  • Mt. Gox- The Japanese exchange which was very famous once was hacked in 2011. The attackers managed to gain access to an account which belonged to its formed owner- Jed McCaleb. While this attack took place, the hackers created a huge amount of fake BTC. Then they flooded the exchange with simulated supply. This led to a massive downfall in BTC price. Before the exchange could suspend trading-2,000 real BTC were bought and withdrawn.

It was in February 2014 that Mt. Gox announced about the hack taking place 3 years back. It was revealed that those hackers managed to siphon off thousands of Bitcoins from its wallet. In that period- Mt. Gox was where over 70% of bitcoin transactions took place. It remains the largest ever Bitcoin heist till date. As the Tokyo-based exchange stopped the BTC withdrawals, the crypto community got into panic mode.

CEO Mark Karpeles eventually left the Bitcoin Foundation. The site also went offline as well. Finally, Mt. Gox lost 100,000 BTC from its own holding and 750000 BTC belonging to the users. This magnitude of the hack and the resultant monetary burden led to the bankruptcy of the exchange.

  • BitGail- Another infamous crypto exchange hack that made headlines is that of Bitgail. The Italian crypto exchange confirmed tokens worth approx $170 million were stolen. This hack took place in 2018. The reports indicated a shortfall of17 million Nano tokens. However, the exact timing of the hack was not known.
  • NiceHash- Slovenia-based NiceHash dealt with aidinf crypto currency miners buy Bitcoins. The miners were shielded from third-party threats. There was no prepayment involved-which was a unique feature of the platform. In December 2017 the users reported hardships in logging in their accounts and it was found a massive cyber attack affected the exchange. The loss was equivalent of $ 70 million. The saving grace is despite the high losses, NiceHash managed to remain operational. Founder and CEO Marco Kobal hired a new management to restore confidence of the investors.
  • Poloniex- Poloniex is another large crypto exchange that was exposed to hacking exploits. The hackers stole 97 BTC in 2014 which was more than 12% of the exchange’s BTC supply. They did this after finding a major critical loophole in its software. However, the good thing is the exchange finally compensated the affected users and reimbursed them fully. This helped Poloniex operate and maintain its brand image.
  • Bitstamp-This Luxembourg crypto exchange hack was different in nature. The hackers targeted the Luxembourg exchange employees and not the end users in 2015. The company’s staffs fell prey to a cunning phishing attack. They gave the hackers access by opening emails and messages on VoIP apps. A Bitstamp system administrator named Luka Kodrich ended up downloading malware in PC which led to the hack crippling the exchange.
  • Coincheck- Coincheck in Japan was exposed to hacking in January 2018. The exchange’s hot wallet was targeted and from it NEM tokens worth 523 million were stolen. The hack led to the crypto community getting united and stringent hacking proof measures were also adopted.
  • Bancor- Bancor based in Switzerland was exposed to hacking attacks in July 9, 2018. The hackers managed to steal $23.5 million. The exchange was swift to react. Bancor made a coalition and froze the Transactions. It recovered BNT worth $10 million thereafter. This helped the exchange remain operational.
  • Cryptopia- New Zealand based Cryptopia exchange is still recovering from a hack that took place in January 2019. The exchange opted for bankruptcy. It is not certain if recovery will be possible or not.
  • Bifinex- Bifinex based in Hong Kong used to be the biggest crypto currency exchange of the world before it was acquired by ANX. The exchange was exposed to an attack in August 2016 which led to stealing of bitcoin amounting to almost $72 million. The shocking thing is the attackers managed to breach the multi layer security and withdraw token directly from the user wallets. They tricked its BitGo algorithms –leading to the hack. While Bitfinex did not hide anything and eventually compensated the users by buying assets from the ICO. However, the stolen money could not be tracked.
  • Bithumb- Bithumb in South Korea is a crypto exchange that fell prey to hack in March 2019. It paused cryptocurrency withdrawals as well as deposits after the security breach was found out. Around 3 million EOS were stolen from its hot wallet. However, later the exchange said the funds of the users were safe in cold wallet.
  • Binance- Binance- based in Malta, known as one of the big cryptocurrency exchanges fell prey to a large security breach in May 2019. The hackers used plenty of tactics including viruses and phishing. They siphoned off 7074 BTC- worth $40 million in a single transaction. The exchange set up one Secure Asset Fund for compensating the clients.
  • BITPoint- BITPoint, a major cryptocurrency exchange based in Tokyo lost almost $32 million in a hack in July 2019. It was a hot wallet breach. Only a miniscule amount could be recovered.
  • Upbit- Upbit, a South Korea based cryptocurrency exchange was also subjected to hacks. The exchange found out the hack rather quickly and adopted corrective measures. Its hot wallet was compromised in the hacking attack. The exchange has promised to safeguard user assets thereafter.
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