How to Avoid Recurrence – Cryptopolitan

Cryptocurrency has gained immense popularity since its inception, and it has become a prime target for hackers. As digital currencies gain more attention from investors around the world, cybercriminals are also increasingly targeting them for illegal activities. This article will discuss some of the most devastating crypto hacks to date and provide tips on how to protect yourself from similar attacks in the future.

Ronin Network – $595 million

The largest cryptocurrency theft to date occurred when hackers hacked Ronin, a gaming-based crypto network, for an astonishing $620 million. Composed of 173,600 ETH (roughly $595 million) in digital currency and USD tokens worth another $25.5 million, the hacker gained access to the wallet using private keys.

To help resolve the issue, Ronin has contacted the police and is working to recover stolen funds. As one of the most popular play-to-earn games out there, Axie Infinity prides itself on its security protocols – but this unfortunate incident serves as a reminder that we need to do more to protect against malicious attacks.

Although it happened in early 2022, it should go down as a warning to anyone considering investing in cryptocurrencies.

Poly Network – $610 million

Poly Network suffered a significant attack worth $610 million in August 2021, which resulted in the theft of large amounts of personal data. Hackers infiltrated the network through a variety of sophisticated and carefully planned tactics.

Social engineering was used to gain access to user accounts, as well as to exploit known vulnerabilities in the system. In response to the breach, Poly Network implemented upgraded security measures to ensure that their customer data always remains secure.

As a result, the company is confident that users’ data remains safe and it is business as usual for all concerned.

Coin check – $534 million

In January 2018, Japanese crypto exchange Coincheck sent shockwaves through the cryptocurrency industry following news of a major hack in which thieves stole over 500 million NEM tokens (XEM), valued at approximately $534 million.

The attack, one of the largest hacks in cryptocurrency history, resulted in a large number of stolen funds and exposed security vulnerabilities found in many other cryptocurrency exchanges. Fortunately for the victims, the NEM Foundation tracked down the stolen currency to prevent its use elsewhere.

So far, the investigation into the attack has not been completed, leaving many to wonder how something like this could have happened.

MT. Gox – $450 million

Mt. Gox hack of February 2017 was one of the most infamous events in cryptocurrency history, as it resulted in a major disruption of the Bitcoin market and a loss of over $450 million in coins.

The scale of the attack surprised many and even caused around 20% drop in Bitcoin rates around the world. There were reports that this attack had been several years in the making, due to security flaws that were accepted or overlooked by Mt. Gox’s management before they were eventually exploited by hackers. Since that fateful incident, a wealth of security advances have been in place to protect exchanges from such attacks and help mitigate their effects when they occur.

Upbit Wormhole hack – $320M

In February 2022, a massive hack occurred on South Korean cryptocurrency exchange Upbit, resulting in an estimated $320 million stolen from user accounts.

The hackers initially targeted a wormhole in the exchange’s system to take advantage of encrypted wallets; however, experts believe that due to Upbit’s sophisticated security protocols, they forced the hackers to use a phishing scam to gain access to user information and private keys.

The hack was one of the biggest crypto heists and has left many exchanges on high alert, increasing their security measures to prevent similar attacks from happening. It serves as a reminder that while we may see digital currencies as anonymous and secure means of payment, they remain vulnerable to malicious activities.

KuCoin – $45 million

The Kucoin hack, which happened in September 2020, was one of the biggest cryptocurrency heists in history. This incident resulted in the theft of $45 million worth of digital currency from users’ accounts.

Despite a recovery effort that has returned 84% of the stolen funds back to their original owners, approximately $285 million remains unaccounted for. It is important to note that this is not an isolated incident and that other cryptocurrency exchanges are vulnerable to similar threats due to their semi-anonymous nature and lack of government regulation.

It is important for both sellers and investors to take extra precautions to stay safe when dealing with digital currencies.

Pancake bunny

In May 2021, an alarming incident occurred on the Binance exchange platform. In a flash loan attack, a malicious actor borrowed a significant amount of Binance Coin (BNB) and manipulated its price by dumping it all on the BUNNY/BNB market.

The resulting chaos was astonishing: in just 30 minutes, the price of BUNNY shot from $150 to $240 before falling back to $0. Fortunately, no money or cryptocurrency was lost due to quick action by the exchange’s security protocols and risk management team.

Despite this, such an attack still reflects poorly on crypto exchanges, as it shows how easy it can be for unethical actors to disrupt trading activities and cause chaos within minutes.

Bitmart – $196 million

Bitmart, a cryptocurrency exchange, recently fell victim to a hacking incident that resulted in the theft of an unprecedented $196 million dollars. Despite efforts to recover the stolen funds, most of them remain undetected and many victims are still awaiting justice and the return of their embezzled assets.

Analysts have linked the heist to a vulnerability found in the hot wallet system of Bitmart’s network, making it easily penetrable to the hacker who mined tokenized assets such as Binance Coin (BNB), Safemoon and BNBPay.

While this terrifying attack may seem obvious at first glance, many national security agencies around the world are using teams to probe deeper into darker crevices to uncover those responsible for this malicious act.

Beanstalk – $80 million

In April 2022, Beanstalk’s DeFi-based project fell victim to a flash loan attack where a hacker exploited the platform’s majority vote management system to exploit to their advantage.

Subsequently, the hacker fled with an astonishing $80 million while losses on the platform were over $182 million. But amid all this chaos, news reports state that the hacker donated some of the money from the heist to Ukraine’s crypto donation wallet, showing that despite the criminal activity, even hackers can have altruistic behavior.

This terrifying yet strangely heartwarming hack is certainly a reminder to users that cryptocurrency is still in its infancy and we need to address weak points before allowing the public to invest their money in any cryptocurrency project.

Bitgrail – $17 million

In April 2018, BitGrail, a small Italian exchange that traded lesser-known Nano (XRB) tokens, suffered a major hack, when hackers stole at least 17 million tokens.

Investigations into the incident suggested the heist was an inside job, amounting to a staggering $150 million. It is also disturbing that it happened via wallets that were kept in cold storage – investors’ wallets kept offline and considered much harder to break. With this event serving as yet another warning to online traders, greater security measures must be taken by exchanges to protect investors from having their hard-earned money stolen.

Factors to consider before investing in a crypto project

Before investing in any crypto project, investors should consider the following factors:

1. Security: Exchanges must have a high level of security against cyber attacks and other malicious activities. They should also comply with relevant industry regulations, such as the EU’s GDPR, to protect customer data.

2. Transparency: The exchange must be open about its operations and provide sufficient documentation for trading activities. This includes providing details of fees, token listings and liquidity information.

3. History: Investors should research the history of an exchange before investing, look at past performance and user sentiment to ensure it is trustworthy and reliable.

4. Reputation: Crypto exchanges should have an excellent reputation in the community for providing reliable services. This includes providing good customer service and responding to any problems or requests users may have.

5. Technology: Exchanges should be up-to-date with the latest technologies, such as blockchain, encryption and AI, to ensure that their network is secure from external threats.

6. Liquidity: Investors should check the liquidity of the exchange before investing in crypto projects, as this will help ensure that they can quickly convert their assets into cash if needed.

7. Rate of return: Finally, investors should also consider the return that an exchange provides compared to other exchanges and projects on the market before making a final decision on where to invest their funds.

Conclusion

Cryptocurrency is still a new asset class and it is important for investors to exercise caution when investing in any crypto project. By considering the factors outlined above, investors can better ensure that they are not exposing their funds to unnecessary risk.

Investigative efforts by international security agencies help keep the crypto space safe from malicious actors and potential financial losses.