Since the inception of cryptocurrency, there have been crypto platforms where you can buy and sell Bitcoin for example. These platforms for pools of massive coins, which is something that attracts the attention of organized crime. Usually the security systems manage to stop the cyber attacks, but unfortunately in some instances, hackers are still able to penetrate the crypto exchange. This has happened a lot already, which is why lots of coins have been stolen by hackers from exchanges. In this blog, a few of the biggest crypto hacks will be mentioned.
The largest and most popular exchange Binance was robbed in 2019 for almost 7,000 Bitcoins, which were then worth 60.5 million dollars. Hackers stole these coins by logging in on Binance via API keys, 2FA codes and other usage information collected from various users. Binance, which bears the name of a reputable exchange, prepaid users’ losses and tightened its security measures as a result of this hack.
Kraken is an American exchange platform that was hit by DDoS attacks in May 2017. At that point, Kraken users were unable to trade and the price of Ethereum (ETH) hit a low of 29 US dollars. This flash crash led to liquidations of many leverage traders. Five of these filed a lawsuit against Kraken, seeking 5 million US dollars in compensation. According to Kraken, it turned out that the timing of the DDoS attack and the big sell order was rather coincidental and that there was no market manipulation involved.
The South Korean exchange Bithumb has been hit by cyber attacks three times. One hack was a lot bigger than the other. The biggest theft was one of about 31.5 million US dollars, in which criminals looted Bithumb’s hot wallets that were filled with Ethereum. Bithumb was also the victim of a hack in which the data of 30,000 users was stolen by a hacker who gained access to a computer belonging to a Bithumb employee. Shortly after this, the accounts were emptied. The stolen funds had a combined value of approximately 12 million US dollars. The last time Bithumb was not attacked from the outside, but from within. An employee of Bithumb allegedly turned against the company and stole 18.7 million US dollars worth of Ripple (XRP) and Eos (EOS) tokens. In all cases, the users were refunded by Bithumb.
Bitfinex, the Hong Kong-based exchange, was robbed by hackers in August 2016 for nearly 120,000 Bitcoin, which at the time was worth 72 US dollars million. The data to the multisig wallet fell into the wrong hands, giving intruders access to Bitfinex’s hot wallet. Investigations revealed that there were no internal links to the disappearance of the Bitcoins anywhere. This raises questions, as Bitfinex has never been clear about how the Bitcoins were moved. To make up for the financial loss, Bitfinex decided to split the loss among its users. Each user received one BFX token in exchange for each dollar taken. This token could be exchanged for dollars at a later date.