When you envision a bank heist, you may think of planned-out bank robberies or The Ocean’s series. However, 2022 is changing the definition of theft. With the rise of cryptocurrency, a handful of criminal organizations have seized the opportunity to steal hundreds of millions in value while counting on a much lower chance of getting caught. These hacks are becoming more common, and more money is being stolen. Here are five of the largest crypto hacks in history.
- Biggest Cryptocurrency Hacks, Ranked
- How to Keep Your Cryptocurrency Safe
- Can Crypto Be Hacked?
- Frequently Asked Questions
Biggest Cryptocurrency Hacks, Ranked
5. Wormhole, $326 Million, February 2022
Wormhole is a decentralized finance (DeFi) app that allows users to connect the Solana blockchain with other major blockchains. With the nature of the project, it had to hold a large amount of crypto to fulfill trades and provide funding for its users, making it a target for potential hacks.
The actual hack occurred because the developers were experimenting with code that had not been deployed yet. The code was meant to fix bugs in the project but actually provided a loophole for the hacker to enter the project and send themselves 120,000 wETH, worth over $325 million at the time. As of May 2022, the funds have not yet been recovered.
4. MT Gox, $470 million, 2011-2014
MT Gox was one of the first Bitcoin exchanges available. At its peak, it oversaw over 70% of all Bitcoin transactions. Since crypto was such a new phenomenon at the time, the developers did not know how to secure the site or handle the trading volume. As such, they were slowly robbed of their Bitcoin holdings over the course of several years.
To execute the heist, hackers entered the site from the back end and slowly transferred Bitcoin to themselves between 2011 and 2014. Over the course of those three years, the hackers managed to steal over 850,000 Bitcoin from both the exchange owners and the exchange’s customers. At the time, the value was $470 million. However, it would be worth several billion today. After the attack was discovered, MT Gox shut down its operations. However, it managed to recover around 200,000 of the stolen Bitcoin. It continues to face lawsuits.
3. Coincheck, $532 million, January 2018
Coincheck is another exchange that was hacked, losing over $530 million in January 2018. The vulnerability that was exploited in the case of Coincheck was that it kept its funds in a hot wallet connected to the internet. Because of this practice, hackers were able to access the wallet and send the funds to themselves.
The token of choice was NEM (XEM). While hackers were able to steal the funds, the developers were able to tag the NEM tokens so that others knew they were stolen. Although taking this action meant that the tokens could not be used on any major exchanges, many believe that they were used on the dark web or in private.
2. Poly Network, $610 million, August 2021
Poly Network is the most peculiar hack on this list. The initial hack was from a bug that allowed the hacker to send themself tokens from the exchange. The hacker made off with more than $600 million in a variety of tokens. However, the hacker soon began to speak with the owners of Poly Network and surprisingly agreed to give back a majority of the funds.
The hacker gave back everything except for $33 million in Tether (USDT). Additionally, $200 million was stuck in a wallet that required passwords from both the hacker and Poly Network. To get these funds back, Poly Network gave the hacker $500,000 and even offered them a job. Eventually, the password was given and the funds were returned.
1. Ronin Network, $620 million, March 2022
Ronin Network was the blockchain that housed the game Axie Infinity. The game was continually rising in popularity over the course of the last year or so, but the largest hack in crypto history halted its growth.
The hack happened as Axie Infinity saw a huge increase in demand, so it lowered its safety standards to keep up. Unfortunately, this decision left a back door open that allowed the hackers to run off with over $600 million. The U.S. Treasury Department identified the hackers as the Lazarus Group, a team of hackers from North Korea. The Ronin network team is actively working with governments and other experts to help recover the stolen funds, and the users are questioning when, or if, they will get their funds back.
How to Keep Your Cryptocurrency Safe
While you may not be able to control if an exchange that you use gets hacked, you can use methods to protect your personal funds from being stolen in the event of a hack. The most effective way to keep your crypto safe is through a hardware wallet.
Hardware wallets are physical devices that store the private codes needed to send crypto. If the physical device is not present to confirm transactions, then crypto cannot be sent.
Ledger is a leading brand of hardware wallet known for its safety and usability. It currently offers Nano S and Nano X models. The Nano S offers basic features while the Nano X is designed for easier use with bluetooth connectivity and a larger screen.
Can Crypto Be Hacked?
Crypto can be hacked in multiple ways, on both an individual level and a network level. For individuals, you can be hacked through phishing scams, in which hackers connect to your wallet and send the contents to themselves.
Additionally, a blockchain can be hacked through either a backdoor exploit or a 51% attack. This attack is when one entity controls 51% or more of the verification power on a blockchain, which means that they can verify any transaction that they would like. While a 51% attack is extremely unlikely, it is still possible.
In any event of a hack, whether it is on just your wallet or on a network that you are using, it is important to take necessary safety measures to ensure that your funds will remain in your possession.
Frequently Asked Questions
Are crypto wallets safe?
Crypto wallets are safe because they help you protect your investments. At the same time, you should always use the most up-to-date wallet to protect yourself from hacking. Don’t rely on the exchange you’re working with.
Are crypto investments volatile?
Crypto investments can be quite volatile and you must monitor the market carefully when spending your money.
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