The biggest hacks of crypto platforms: do exchanges learn from mistakes?


Over the entire existence of the cryptocurrency industry, a large number of cyberattacks have been made on exchanges. It is believed that cryptocurrency exchanges are one of the favorite targets for cybercriminals, but is this really so?

This was indeed the case in the early years of digital assets. An example of this is the history of the Mt.Gox exchange. This is one of the first and largest attacks on a crypto exchange. Then, due to the incompetence and negligence of the staff, the exchange clients lost $400 million in BTC. In this article, we propose to get acquainted with other stories of sites that were also attacked by hackers.

Coincheck

In early 2018, cryptocurrency exchange Coincheck was hacked. Attackers managed to steal more than $ 500 million in NEM coins. Representatives of the exchange did not go into the details of the hacking, but only assured that it was not because of insider information. According to the developers, it became known that there was a problem in the security system that hackers could take advantage of in order to steal such an amount. Users’ digital assets were stored in hot wallets, contrary to what is customary to store them in cold ones, where there will be no access to the outside world. In addition, Coincheck did not have multi-signature protection.

Mt.Gox

In 2014, Mt.Gox was the largest crypto exchange in the industry. However, as it turned out later, inexperienced people with poor management worked inside the company. This contributed to the fact that the exchange was attacked by hackers. As a result of the attack, $ 460 million was stolen, as well as $ 27.4 million from bank accounts. Later, CEO Mark Karpeles confirmed the information and admitted that there were a large number of vulnerabilities in the system. Interestingly, this was not the first cyberattack on the exchange. In 2011, $ 8.75 million was also stolen from the site. As it turned out later, hackers, starting this year, continued to rob the exchange using an unencrypted key. Events quickly got out of control and at the end of February 2014 the exchange went bankrupt.

Bitfinex

Bitfinex was hacked in 2016, and scammers managed to steal about $ 60 million. The cyber attack threw many users into confusion, as there were many incomprehensible moments. The company’s management did not give any comments on the hacking. It is only known that hackers managed to attack user records where multisignature was used.

Due to the large amount of money that was stolen, many users had a logical desire to find someone to blame. The first on the list was the Bitfinex exchange itself, since it had one out of three private keys at its disposal (three keys are needed to complete transactions). Questions were also raised by the fact that 120,000 BTC were withdrawn without hindrance.

Interestingly, in April 2021, 10% of the stolen BTC were moved. This happened when Coinbase went to Nasdaq. It can be assumed that the scammers wanted to transfer funds without drawing attention and took advantage of the hype surrounding the event with Coinbase.

Bithumb

In July 2017, representatives of the Korean crypto exchange Bithumb issued a statement. It said that the scammers managed to gain access to the identification data of the platform residents. Information about 30 thousand users was in the hands of hackers.

Six months after the announcement, it turned out that hackers attacked the exchange at the beginning of 2017, but the management and the users themselves found out about this only six months later. It also turned out that in addition to the personal information of users, hackers stole about $ 7 million in cryptocurrency. At the end of the year, when digital assets began to rise in price noticeably, the damage to the exchange increased – from $ 7 million to $ 80 million. South Korean intelligence was accused of the DPRK attack, but the story did not continue.

In June 2018, the exchange was once again subjected to a cyber attack. This time, users of the trading platform lost about $ 32 million. Now the exchange promises to compensate for the damage to customers, and plans to pay compensation at its own expense.

BitGrail

In February 2018, the Italian exchange BitGrail was forced to report that hackers had withdrawn Nano tokens for a total of $ 170 million.The Italian authorities seized the bitcoins stored in the wallets of the crypto exchange in order to satisfy the demands of the affected customers of the trading platform.

The funds from the wallets of the exchange were removed by the decision of the court of Florence. After the incident, the exchanger was forced to file for bankruptcy. This happened a year after the launch of the trading platform.

Conclusion

Despite the fact that the crypto industry is developing and exchanges are trying to improve the security system, hackers still carry out attacks on them. Therefore, you should not blindly trust a large number of assets and leave one site on the wallet. Better to separate them and store them in cold wallets. And for comfortable trading in top cryptocurrency assets, we suggest you draw your attention to the RevenueBot service.  The service provides the opportunity to create trading bots on the largest cryptocurrency exchanges: Binance, Bittrex, Bitfinex, Exmo and others. Creating a bot is free of charge, the service will not take commissions until the client begins to make a profit from trading the bot. With the help of deep settings of the bot, the service’s clients implement trading strategies that are problematic to experience in normal trading. We will immediately indicate: the bot does not have access to customer funds on the exchange, but trades using API keys, that is, the account will remain out of access. RevenueBot has over 28 thousand customers who earn money thanks to trading bots.

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