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Top 10 crypto exchange hacks we will not forget

Maya Mandz | Jul. 25, 2019
Top 10 crypto exchange hacks we will not forget

Users of the cryptocurrency exchanges are not the only victims of crypto hackers' actions. Crypto exchange's hack like a stone thrown into the water: a huge number of people and corporations feel the crypto exchange hack consequences on themselves.

Often, major hacks lead to bankruptcy and the closure of crypto companies. Susan Eustis, executive director of WinterGreen Research, claims that the hacking of crypto-exchangers and the theft of bitcoins cost the governments of different countries $ 11.3 billion.  

July 25, 2019 | AtoZ Markets - According to the different resources, annually, hackers steal cryptos worth $ 200 billion. For the entire existence of Bitcoin and Ether, crypto jackers have stolen over $ 1.2 billion coins. Atoz Markets decided to collect information about the top 10 crypto exchange hacks in the entire period of the cryptocurrency existence. 

Who are those crypto hackers and where do they come from? 

The crypto exchanges’ hacks involve large thefts and tens or even hundreds of millions of dollars loses. According to the latest Chainalysis research, most of the crypto crime incidents are dominated by two prominent, professional hacking groups. Those two groups are responsible for stealing around $1 billion to date, at least 60% of all publicly reported hacks. 

Notable, that in March 2019, a group of experts told the UN Security Council that most of the cyber attack traces, including crypto exchanges’ hacks’, lead to North Korea which has been the driving force of crypto hack incidents since 2016

As per the announcement, the country used its illegally obtained $ 670 millions to “avoid economic sanctions and get foreign currency." 

1. Coincheck: $530 million

The crypto theft from the Japanese exchange Coincheck was called one of the biggest cybersecurity hacks in history. Due to the security breach, which occurred on the crypto trading platform in January 2018, hackers managed to steal almost 500 million NEM tokens from the Coincheck hot wallets, which at that time accounted for around $530 million.

After the hack attack, the Coincheck informed the public that it would compensate each stolen token at a rate $0.81 per token. The overall amount had accounted for almost $420 million. Back then the incident highlighted the vulnerabilities in crypto trading and encouraged Japanese financial regulator, the Financial Services Agency (FSA), to start to investigate the security measures of Coincheck’s platform.

2. BitGrail: $195 Million

Italian exchange BitGrail was hacked in early February, with team members suggesting that $195 million in the token nano was stolen. At this point, though, Coin Telegraph suggests that there remains confusion about the hack itself; the blame may rest with BitGrail founder Francesco Firano, the nano development team or hackers.

3. Zaif: $62.5 million

In its September 2018 hack, another Japanese crypto exchange, Zaif, lost approximately 7 billion yen ($62.5 million) in the bitcoin (BTC), monacoin (MONA) and bitcoin cash (BCH) cryptocurrencies. In November, cybersecurity experts at Japan Digital Design, a subsidiary of Mitsubishi UFJ Financial Group (MUFG), announced, that they might have found the bad actors behind the hack.  

4. Binance: $40.7 million

The largest crypto exchange in the world - Binance’s experienced large scale security breach in May 2019. Back then, the attackers managed to steal roughly $40.7 million in Bitcoin.

The company’s CEO Changpeng Zhao, in his letter to the crypto community, explained, that platform’s security damage was discovered on 7 of May and the hackers were able to obtain API keys, two-factor authentication codes and other information of the Binance users.

Later, as an apology for weeks of the service suspension and to express its gratitude to the Binance’s community support the company decided to give away BNB tokens worth $1.2 million.

5. Cryptopia: $2.5 million and the company’s bankruptcy  

One of the saddest endings faced the New Zealand cryptocurrency exchange Cryptopia. The platform was allegedly hacked in January 2019. The first Cryptopia tweet regarding hack incident appeared on January 13th. The announcement did not indicate the amount of damage, the company just noted that it is "significant."

As later media revealed, the possible amount of the stolen ETH account to over $2.5 million. The security breach cost exchange multi-million dollars in losses and, eventually, it announced shutting down its services.  

What happened to the stolen funds? 

As per Chainalysis report, the hackers typically move stolen funds through a complex array of wallets and exchanges in an attempt to disguise the funds’ criminal origins. The crypto jackers usually do not move stolen funds at once, but usually waiting until interest in the theft has died down. Once they feel safe, they move quickly.

The Cryptopia’s attackers were following the same tactics. After the New Zealand exchange announced about its liquidation, the analysts from the blockchain company CoinFirm, reported that Cryptopia hackers started moved $16 million stolen funds to several wallets.

6. Bitpoint: $28 million

Due to the security breach, which was detected on July 11, 2019, the Japanese crypto exchange Bitpoint lost around 3.02 billion yen ($28 million) in cryptocurrencies.

According to Bitpoint the hot wallet which the funds were stolen from contained five different cryptos including bitcoin, bitcoin cash, and XRP. Later the crypto company confirmed that it will repay its customers with the cryptocurrency after the platform’s service is restored. 

7. Bifinex: $72 million at that moment

The Hong-Kong based crypto exchange Bitfinex announced the theft of $72M in bitcoins from its customers’ accounts on Aug. 2, 2016. Bitcoin transactions were halted and the company reported the theft to law enforcement and hired Ledger Labs, a blockchain consultancy firm, to investigate the incident.

Back then, the exchange took a bold decision to “generalize” the losses across all accounts and assets: even the unaffected by the hack users got their funds reduced by 36%. 

In April 2017, Bitfinex announced that it had finally completed reimbursing customers affected by the hack. All BFX tokens were redeemed and destroyed. Bitfinex claimed that it had achieved “full recovery” just 8 months after the incident.

8. Bithumb: $30 million

One of the biggest cryptocurrency exchanges in South Korean, Bithumb was hacked in June 2018. The company has made a public announcement where it stated that the client’s loss will be covered by the company.

Following the hack, the South Korean company stated it might be able to downsize the financial damage through ongoing damage recovery. It further stated that it was collaborating with cryptocurrency exchanges and some other organizations in order to prevent further losses and help retrieve the funds. 

9. Youbit: $73million

Another South Korean crypto exchange, Youbit, filed for bankruptcy after losing 17% of its crypto holdings in the cyber-attack. In April 2017, Youbit, formerly called Yapizon, reportedly lost 4,000 bitcoins now worth $73m (£55m) to cyberthieves

10. Mt.Gox: $473M at that moment

The Japan-based bitcoin exchange Mt.Gox halted all Bitcoin transactions on February 7, 2014. The company was citing a bug in the Bitcoin software that allowed the alteration of transaction details.

On Feb. 28, the exchange’s CEO Mark Karpeles revealed that the company had lost 750,000 of its customers’ bitcoins and 100,000 of its own bitcoins. Later the company filed for bankruptcy protection both in Japan and the USA. 

Later research showed that cryptocurrency was stolen from the exchange’s hot wallet. Mark Karpeles, was arrested on August 2015 and spent a year in prison. He was charged with fraud, embezzlement, and manipulating the Mt. Gox computer system to increase the balance of an account. 

Think we missed something? Let us know in the comments section below.

Disclaimer: The views and opinions expressed in this article are solely those of the author and do not reflect the official policy or position of AtoZ Markets.com, nor should they be attributed to AtoZMarkets.