Today, cryptocurrency has become a well-known technology. It is interesting cause even those who are not directly related to the field know about it. Although, it is famous not only for its cutting-edge technologies. Even such a seemingly safe technology has a list of high-profile crypto hacks in its history. Each resulted in stealing by thefts millions of dollars of digital assets. So, what are these cases famous for? How did they happen? Let’s explore.
Mt. Gox (2014)
Mt. Gox is one of the most famous hacks ever instituted in the cryptocurrency field. Mt. Gox is a Tokyo-based Bitcoin exchange that, back then, managed almost 70% of all Bitcoin transactions. Later, in February 2014, Mt. Gox announced that they had lost around 850,000 Bitcoins. The stolen value was around $450 million at that time. It was found that the exchange platform broke after a prolonged and undetected cyber attack.
So, how did that happen? Many consider poor security practices as the main reason for being hacked. Another reason is that all Bitcoins were stored in one wallet, making it a desirable goal for hackers. In addition, poor security practices, such as no multi-factor authentication and intrusion detection systems, made it worse. Mt. Gox’s lack of security and prioritizing money over safety made it a significant loss of its users. Such an example clearly shows how vital cybersecurity is in the cryptocurrency field.
Coincheck (2018)
Coincheck is another famous Japanese exchange platform under hackers’ attack. The overall harm done to this exchange was related to the NEM cryptocurrency and valued at about $530 million. In this case, hackers used the poor security of the platform. As a result, they got unauthorized access to the company’s hot wallet, stealing a lot of digital assets.
After this incident, Coincheck paid extreme attention to its security practices. They found that the main problem was storing all the assets in one hot wallet. After that, they implemented several techniques, such as the available additional cold wallet and regular security checks. This incident showed the importance of security and why it is a good practice to improve it continuously.
Binance (2019)
Binance is one of the largest exchange platforms in the world. It allows exchanging many digital coins, such as
BTC to LTC, ETH to USDT, DOGE to USDT, and others. However, even this platform had a security breach in May 2019. It resulted in the loss of 7,000 Bitcoins, around $40 million at that time. Hackers used several ways to get access to the assets.
- They used sophisticated phishing techniques;
- Compromised many user accounts;
- Used API key to get through the platform’s security measurements.
As with others, Binance saw the importance of strong security after this security was destroyed. Although, thanks to it, Binance implemented multi-factor authentication and provided users with educational material to prevent phishing attacks.
Poly Network (2021)
Poly Network is a famous decentralized finance (DeFi) platform. Unfortunately, back in 2021, this platform also experienced one of the biggest crypto attacks. The stolen value was around $600 million in several cryptocurrencies. The main problem hackers used was Poly Network’s smart contract code which allowed them to steal assets from multiple networks.
Smart contracts are self-executing agreements that work using blockchain technology. The Poly Network brought more attention to this feature after the attack. They implement such steps as code auditing and security testing to see if there are any potential problems with smart contracts during the development stage.
Final Thoughts
To sum up, all the famous crypto attacks have happened due to poor security, no authentication features, and phishing attacks. These incidents showed how important security is and why this industry should prioritize it most.
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