Cryptocurrency Hacks: How Much Did They Steal?

Cryptocurrency attacks reveal the digital currency’s security flaws, so what are the most significant breaches of all time?

When it comes to the financial headlines, cryptocurrency has taken center stage since it has had such an impact on markets that no one could have predicted. However, this does not imply that the crypto journey has been free of turbulence.

As a result of a cryptocurrency breach, the security of digital money and blockchain is exposed regularly.

There have been several high-profile bitcoin hacks throughout the years.

1. The Coincheck Hack

Coincheck, a Japanese cryptocurrency exchange, has been dubbed the “largest digital money heist in history” for its massive hack.

Approximately 523 million NEM coins were stolen from Coincheck’s hot wallet on January 26th, 2018, according to a report. 

At the time, these coins were worth an estimated $534 million, making it the largest heist in the history of crypto. After hearing the news, NEM’s price fell by about 21%.

Coincheck, even though a hot wallet was the perpetrator, saw it as a safe practice. 

To acquire access to the information they needed, hackers used a phishing assault on emails that workers had opened. 

To get the information they wanted, they installed malware and gathered it all.

Coincheck was purchased by a Japanese company named Money Group in April 2018 after surviving the assault. The victims were immediately compensated with $0.83 for each NEM token that had been stolen by the firm.

2. The Bitfinex Hack

Bitfinex is one of the world’s major Bitcoin exchanges, having been in operation since 2012. Bitcoins totaling 119,756 were stolen from the exchange in August of that year. 

At the time of the breach, the damage was $72 million, which now would be worth more than $6 billion.

Moreover, it is the second-largest breach of a BTC trading platform in history.

A multi-signature account, where many signatories assist manage cash and minimizing risks, was compromised in the Bitfinex breach. You’d need access to several keys to make a transaction using a multi-sig account.

Bitfinex and its partner, BitGo, possessed two secret keys each, while the third key was held by BitGo. Nearly 120,000 Bitcoins were transferred to an unidentified location after hackers gained access to the system’s private keys.

More than $623 million worth of bitcoins stolen from Bitfinex were transferred last month, according to CoinDesk. Around 10% of the stolen money is included in the coins that were recovered.

3. NiceHash Hack

Over 4,700 Bitcoins were stolen from the bitcoin mining marketplace NiceHash on December 6, 2017. At the time of the breach, the stolen coins were valued around $70 million. NiceHash thought that a phishing email had been used to get an employee’s login credentials.

Users were also advised to reset their passwords by the platform.

Even though NiceHash was unable to retrieve the stolen cash, it created a fee refund scheme to maintain its brand. All stolen cash has been restored by December 2020, when the site was hacked.

It’s uncommon for a crypto service provider to fully reimburse its customers after a security breach. NiceHash can have established a precedent for others to follow, though.

4. The BitGrail Hack

Hackers stole 17 million Nano tokens (previously known as RailBlocks) belonging to BitGrail, a digital currency exchange based in Italy. A $170 million loss in fiat cash was the result of the assaults that happened in February 2018.

BitGrail is being held liable by Italian authorities for the hacking. When the initial robbery was discovered, investigators concluded that individuals in charge of the exchange were either responsible for the theft or did nothing to stop it.

When BitGrail creator Francesco Firano instructed the engineers to fork the blockchain before a security issue, there were worries. Developers declined since it suggested that Firano may sabotage the trade.

The Basics of Cryptocurrency and Investing

5. The Mt. Gox Hack

Unquestionably, the most prominent Bitcoin attack was that of Mt. Gox in April of 2009. In 2014, while the currency was still relatively young, there was a breach. Several causes contributed to the downfall of an exchange that handled 70% of Bitcoin trading activity during its golden days.

The second assault on the Japan-based exchange, which ended in bankruptcy in 2014, resulted in the loss of around 850,000 Bitcoins, worth $460 million at the time of the breach. Around the last year, the same amount of Bitcoins has grown in value to over $43.2 billion.

There was a lack of code security at Mt. Gox, according to Wired. It was possible for programmers working on the same file to mistakenly overwrite each other’s coding since there was no version control software system in place.

On top of that, untested software was repeatedly offered to consumers, something you wouldn’t anticipate from an exchange the size of Mt Gox.

The enormous loss may be directly attributed to these shortcomings and arrogance on the part of those responsible. 

Mt. Gox was forced to declare bankruptcy shortly after the assault and shut down operations. It’s also worth noting that the exchange’s president was convicted of falsifying data but evaded prison time.

In a Nutshell

Since the bitcoin market is valued at over $2.43 trillion, it’s simple to understand why fraudsters are so interested in digital currency transactions.

Investors in the crypto industry should choose cybersecurity-compliant platforms and implement strong security safeguards. To keep your money safe, familiarize yourself with the most prevalent cryptocurrencies frauds and scams.

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