Cryptocurrency exchanges have undergone series of attacks as threat actors are constantly hunting for their precious assets. According to a recent report, about $11 billion has been obtained from the cryptocurrency exchanges, wallets, and mining platforms since 2011.The Cryptocurrency exchanges have over the years been highly targeted by hackers making it unsafe to rely on its wallets for a long term store of assets.
The first incident was recorded in 2011 when Mt.Gox which was the leading cryptocurrency exchange on the internet was hacked and had its Bitcoin wallets emptied. Hackers accessed the computer of one of the auditors of the platform in an attempt to manipulate the Bitcoin price to a single cent. After creating the artificial price, they created a selling order using the private keys of users and bought them off cheaply and escaped with 2000BTC.
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Another attack was launched in 2014 causing the cryptocurrency exchange to collapse. By 2014, Mt.Gox was controlling about 70% Bitcoin transactions in the world. Hackers stole 740,000BTC which represented 6% of Bitcoins in existence at the time. This is by far the highest recorded stolen Bitcoins any of the cryptocurrency exchanges have ever lost, and this was the beginning of many hacking incidents against exchanges.
The report stated that Bitcoinica was another victim of severe cyber-attack causing the platform to lose about $1.05 million worth of Bitcoin. Bitcoinica suffered three separate hacks within 2012. The first attack happened in March, and hackers decrypted the hot wallet of the platform and made away with 43554BTC. The second attack occurred in May after hackers accessed their database causing them to lose about 38000BTC. The last attack was recorded in July as hackers stole about 40,000BTC which was recovered according to the report.
In 2013, about $109 million worth of cryptocurrency was hacked from major exchanges with PicoStocks losing about $62 million
Bitstamp, another cryptocurrency exchange lost about 19,000BTC to hackers after its operational wallet was compromised. Over $225 million was hacked in 2015 including the BTER hacking incident causing the company to lose 7170BTC. Over $112 million worth of Bitcoin and $17 million worth of Litecoin were lost by various exchanges. Bitfinex lost about 120,000BTC after hackers successfully launched a phishing attack on the cryptocurrency exchange in 2016.
Digital Decentralized Autonomous Organization was also affected by a serious hack in 2016 causing them to lose about 3.6 million Ethereum as captured in the report. 2017 recorded the highest amount lost in the hacking incident as the cryptocurrency exchanges lost about $791 million with Yobit losing about 4000BTC.
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2017 is a very special year for cryptocurrency enthusiasts as Bitcoin price recorded an all-time high of near $20,000. OKEX, another cryptocurrency exchange lost 200BTC in the same year after hackers logged into the account with a German IP address as reported, and engaged in BTC-ETC trading. They sold all the Bitcoins and canceled all the pending orders according to the report. Nicehash, a mining platform also lost 4736BTC after hackers managed to compromise its hot wallet. CoinDash lost about 37,000ETH but hackers later returned 20,000ETH in the same year.
In 2018, the cryptocurrency exchanges lost about $90 million worth of cryptocurrency with Coincheck losing about 500 NEM to hackers.
2019 was no different. According to the report, a cryptocurrency exchange called Bitgrail lost about $11.4 million which is 17 million units of Nano to exchanges. Coinrail lost $320,000 worth of ETH, $339,000 worth of NPXS, and $2.4,000 worth ATX.
Hackers have employed various strategies including launching phishing attacks and infecting platforms with viruses. Binance was hacked and hackers made away with about $60.5 million worth of Bitcoin. Upbit lost $58.6 million worth of Ethereum, Bitpoint lost $32 million worth of BTC, BCH, and XRP. BitTrue lost $2.1 million worth of XRP and many other recorded cases in 2019.
Hackers are always targeting exchanges, and more serious hacks are expected to be recorded to the coming months and years as the Bitcoin price has been predicted to trade as high as $100,000. It is important for exchanges to take cybersecurity seriously and ensure that funds kept by users are given the needed protection. It is also advised that users do not keep a large number of funds in any digital asset on an exchange for a long time. It is important to transfer them into an offline wallet and keep private keys safe to avoid any loss of funds in the future. It is worth noting that investing in cybersecurity is equally important as investing in the future of the cryptocurrency exchanges as the cost of a cyber-attack is mostly higher.
Source: Inside Bitcoins
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