February 29, 2024

Cryptocurrency exchanges have become increasingly popular as individuals seek to buy, sell, exchange, and store digital assets. However, the rise in popularity and value of cryptocurrencies has also made exchanges a prime target for hackers. Over the years, numerous exchanges have fallen victim to cyber attacks, resulting in significant financial losses for users and the exchange platforms themselves. In this article, we will provide a comprehensive overview of cryptocurrency exchange hacks, highlighting the major incidents and what we can learn from them.

The Magnitude of Crypto Exchange Hacks

Since 2012, a staggering amount of nearly $2.85 billion has been stolen from cryptocurrency exchanges. These hacks have affected at least 48 Bitcoin exchanges, resulting in the loss of approximately 0.3% of the total market cap. While successful hacking attempts have decreased since 2021, it is crucial to understand the vulnerabilities that exist within exchange platforms and take appropriate measures to protect our assets.

Common Hacking Techniques

Hackers employ various sophisticated techniques to breach the security of cryptocurrency exchanges. The most common form of attack involves infiltrating the private keys to the exchange’s hot wallet, where a significant portion of users’ funds is stored. This allows hackers to gain access to the assets and transfer them to their own wallets. Additionally, hackers may exploit vulnerabilities in the exchange’s protocols, servers, or even target individual users through phishing attacks and malware.

Lack of Internal Security Measures

One of the key lessons we can learn from cryptocurrency exchange hacks is the importance of robust internal security measures. Many exchanges lack transparency when it comes to their internal security processes and adherence to strict management protocols. This lack of visibility makes it difficult for users to trust the exchange with their funds. Additionally, some exchanges claim to use cold wallet solutions that are 100% offline but fail to provide verifiable evidence of this.

The Best Method for Storing Cryptocurrency Assets

Given the vulnerabilities associated with centralized exchanges, it is crucial for individuals to take control of their own cryptocurrency assets. The best method for storing these assets is by using a personal hardware wallet. Hardware wallets provide an offline storage solution, keeping the private keys away from potential hackers. By utilizing a hardware wallet, users can significantly reduce the risk of falling victim to exchange hacks.

A Chronological List of Hacked Crypto Exchanges

Below is a chronological list of cryptocurrency exchanges that have suffered major security breaches. This list includes centralized exchanges, decentralized platforms, wallet providers, and leverage trading platforms. It is important to note that this list may not be exhaustive, as new hacks can occur at any time.

Date Exchange Cause of Hack Amount Stolen (USD) April 9, 2023 GDAC Obtained access to hot wallet $13 million November 12, 2022 FTX Unauthorized transactions $600 million January 17, 2022 Crypto.com Unknown $34 million December 11, 2021 AscendEX Obtained access to hot wallet $80 million December 5, 2021 BitMart Obtained access to hot wallet $150 million August 19, 2021 Liquid Obtained access to hot wallet $97 million April 29, 2021 Hotbit Obtained access to hot wallet Nil December 23, 2020 Livecoin Compromised system/servers Unknown December 21, 2020 EXMO Obtained access to hot wallet $4 million December 1, 2020 BTC Markets Internal staff error/mistake 270,000 user’s private details September 25, 2020 KuCoin Data leak $275 million July 11, 2020 Cashaa Malware $3.1 million June 29, 2020 Balancer Vulnerability in protocol $500,000 April 19, 2020 Lendf.me Bugs and Re-entrancy attack $24.5 million April 19, 2020 Uniswap Bugs and Re-entrancy attack $500,000 February 5, 2020 Altsbit Obtained access to hot wallet $70,000 December 19, 2019 Youbit Obtained access to hot wallet Unknown November 26, 2019 Upbit Obtained access to hot wallet $49 million November 5, 2019 Vindax Unknown $500,000 July 11, 2019 Bitpoint Compromised system/servers $32 million June 27, 2019 Bitrue Compromised system/servers $4.5 million June 6, 2019 Gatehub Unknown $9.5 million May 7, 2019 Binance Obtained access to hot wallet $40 million March 29, 2019 Bithumb Unknown $29 million March 25, 2019 Coinbene Suspected trusted insider $40 million March 24, 2019 DragonEX Unknown $1 million February 15, 2019 Coinmama Data leak 450,000 user’s private details February 1, 2019 Cryptopia Unknown $16 million January 26, 2019 LocalBitcoins Phishing data on fake site $27,000 October 28, 2018 Maplechange Suspected trusted insider $51,000 September 14, 2018 Zaif Obtained access to hot wallet $60 million June 10, 2018 Coinrail Unknown $40 million April 13, 2018 CoinSecure Suspected trusted insider $3.5 million February 10, 2018 Bitgrail Suspected trusted insider $146 million January 27, 2018 CoinCheck Unknown $560 million December 20, 2017 EtherDelta Server DNS compromised $1.4 million July 5, 2017 Bithumb Unknown $7 million April 22, 2017 Yapizon Obtained access to hot wallet $5.3 million August 2, 2016 Bitfinex Unknown $623 million May 9, 2016 Gatecoin Obtained access to hot wallet $2.14 million March 14, 2016 Shapeshift Suspected trusted insider $230,000 February 16, 2016 BTER Unknown $1.75 million December 11, 2015 Bitstamp Malware $5 million August 15, 2015 BTER Suspected trusted insider $1.65 million July 13, 2014 Mintpal Obtained access to hot wallet $2 million March 4, 2014 Poloniex Obtained access to hot wallet $50,000 February 2014 Mt. Gox Various methods $460 million November 11, 2013 Bitcash Compromised system/servers $100,000 September 12, 2012 Bitfloor Compromised system/servers $250,000 March 1, 2012 Bitcoinica Compromised system/servers $87,000 (Note: The table above is a summary, and the full list of hacked exchanges can be found in the “Additional Information” section of this article.)

Recent Hacks and Lessons Learned

In recent years, several high-profile cryptocurrency exchanges have been targeted by hackers. Let’s take a closer look at some of these incidents and the lessons we can derive from them.

GDAC – April 9, 2023

South Korean crypto exchange GDAC suffered a hack on April 9, 2023, resulting in the loss of approximately $13 million. The hackers obtained access to the exchange’s hot wallet, where they stole around 61 Bitcoins. This incident highlights the importance of robust security measures to protect hot wallets, which store a significant portion of users’ funds.

FTX – November 12, 2022

Embattled exchange FTX, which was already facing financial difficulties, experienced a hack on November 12, 2022. The exact cause of the hack remains unknown, but unauthorized transactions took place after the company filed for Chapter 11 bankruptcy proceedings. The amount stolen from FTX was reported to be around $600 million, underscoring the need for exchanges to prioritize security even during challenging times.

Crypto.com – January 17, 2022

Crypto.com, one of the world’s most popular crypto apps and exchanges, fell victim to a security breach on January 17, 2022. Around 483 customer accounts were compromised, and the hackers made off with approximately $34 million worth of cryptocurrencies. This incident serves as a reminder that even well-established exchanges can be vulnerable to attacks, necessitating continuous efforts to enhance security measures.

AscendEX – December 11, 2021

Bitcoin and cryptocurrency trading platform AscendEX (formerly BitMax) experienced a hack on December 11, 2021. The hackers obtained access to the exchange’s hot wallet, resulting in a loss of approximately $80 million. This incident highlights the need for exchanges to implement robust security measures to protect hot wallets, which are often targeted by hackers.

BitMart – December 5, 2021

BitMart, a popular cryptocurrency exchange, suffered a significant security breach on December 5, 2021. The hackers were able to gain access to the exchange’s Ethereum and Binance Smart Chain (BSC) hot wallets, resulting in a loss of approximately $150 million. This incident underscores the importance of regular security audits and vulnerability assessments to identify and address any potential weaknesses in an exchange’s infrastructure.

Steps to Protect Your Crypto Assets

Given the prevalence of exchange hacks and the potential risks associated with centralized platforms, it is crucial for individuals to take proactive steps to protect their cryptocurrency assets. Here are some measures you can take to safeguard your funds:

1. Use a Hardware Wallet

The best way to secure your cryptocurrency assets is by using a personal hardware wallet. These devices store your private keys offline, making it extremely difficult for hackers to gain access to your funds. Popular hardware wallets include the Ledger Nano X and CoolWallet Pro.

2. Keep Your Software Up to Date

Regularly update your software, including your operating system, web browsers, and antivirus programs. These updates often include security patches that address known vulnerabilities.

3. Enable Two-Factor Authentication (2FA)

Enable two-factor authentication on all your cryptocurrency exchange accounts. This adds an extra layer of security by requiring a verification code, typically sent to your mobile device, in addition to your password.

4. Be Wary of Phishing Attempts

Cybercriminals often use phishing techniques to trick users into revealing their login credentials. Be cautious of any suspicious emails, links, or messages that request sensitive information. Always double-check the authenticity of any communication before sharing personal data.

5. Diversify Your Assets

Rather than storing all your cryptocurrency assets in a single exchange, consider diversifying your holdings across multiple platforms and wallets. This reduces the risk of losing all your funds in the event of a hack.

6. Research Exchange Security Practices

Before using a cryptocurrency exchange, thoroughly research its security practices. Look for exchanges that prioritize user security, use cold storage for the majority of funds, and have a track record of successfully thwarting hacking attempts.

Conclusion

Cryptocurrency exchange hacks have been a recurring issue in the crypto industry, resulting in significant financial losses for users and exchanges alike. By understanding the vulnerabilities that exist within exchange platforms and taking proactive measures to secure our assets, we can mitigate the risks associated with these hacks. Utilizing hardware wallets, keeping software up to date, enabling two-factor authentication, staying vigilant against phishing attempts, diversifying assets, and conducting thorough research on exchange security practices are all crucial steps to protect our cryptocurrency investments. Remember, the responsibility lies with us to safeguard our funds and ensure the security of our digital assets.

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