- Top Crypto Exchanges hacks: the industry problems and future
Nowadays the possibility of owning tokens of the top crypto currencies and even altcoins is as tempting as never before. The desire to get a lot of digital assets at relatively low risk attracts more and more scammers and experienced hacker sharks as the exchanges are often the first and last points of contact between users and the market, making them the most fruitful areas for innovation according to statistics, between the 2011 and November 2017, more than 980,000 Bitcoins have been hacked out of exchanges at all.
Digital age pirates had already succeeded in cracking top world’s exchanges. Today we have prepared a top of the most famous and largest virtual robberies out to date:
1 Coincheck hack — NEM token worth of $530 Million stolen.
The most known and reputable Asian crypto currency exchange had recently shocked the world with the news of the record-breaking theft.
Unidentified hackers had stolen $530 million from the Japanese exchange. ItвЂ™s officials, of course, promised to partially refund almost 260,000 crypto currency investors affected by the theft вЂ“ , no timeframe is established for so far and it is unknown where would the platform get such amount of money anyway.
The hack occurred at the end of January, eclipsing the estimated $400 million in stolen from Mt.Gox in 2014.
Coincheck reported the hackers stole customer deposits of NEM, a less well known digital currency. The exchange promised to use cash from its own funds to pay out 46.3 billion ($426 million) towards covering its users losses. Sadly enough for users, but that makes 20% less than the total value of the virtual tokens that had been stolen.
The price of NEM plunged almost 20% after the theft came to the light of public, but it had since recovered those losses.
2 Mt. Gox — 744,408 Bitcoins (nearly $400,000 million in 2014) stolen.
В No doubt, the most famous theft case and the biggest loss in the history of crypto exchanges in an infamous Mt. Gox hack which led to the largest known loss of Bitcoins so far.
The Mt.Gox, also based in Japan, had been the world’s biggest crypto currency exchange in 2014 when hackers had stolen an estimated $400 million worth of Bitcoin back in the days. Mt.Gox went bankrupt shortly afterward and affected users still haven’t been compensated. The theft of top coin had been a result of a group of high-skilled black-hat hackers attack who had used certain security vulnerabilities in order to get unbelievable number of BTC from the exchange.
Later it became known to state officials that MT. Gox ended up working without a license in the US, which naturally attracted the attention of the feds. Coinlab also filed a $ 75 million lawsuit for breach of contract. The subsequent investigation led to the seizure of another $ 5 million, which caused a significant blow to the reputation of the company.
Unfortunately, it was only the tip of the iceberg — it turns out that the organization had deeper problems. Serious trouble began when the company has ceased to create a healthy culture of development for their software. Since the Director General had to give his approval before approving most of the innovations and processes, platform developers had to spend a lot of time implementing technical solutions.
As with any extremely valuable asset, vultures are always circling — hackers took advantage of weaknesses on the stock platform to gain access to Bitcoins — within a few minutes there was a large-scale sale of coins for millions of dollars, most of which were sold literally for cents. In General, world prices for Bitcoin have stabilized soon after the incident, but the damage has already been huge.
In the end it became known that Mt. Gox lost about an equivalent of about $ 400 million. The stock company was supposed to declare bankruptcy and hundreds of thousands of people have lost money. Japanese authorities arrested the General Director for fraud, later he pleaded not guilty and was released.
3 BitGail — $170 Million stolen
Another fine example of the latest high-profile cyber attack happened just recently the official statement from Italian BitGail crypto exchange confirmed $170 million worth of token missing after the exchange hit.
This is another record-breaking exchange hack during the early 2018, following the Coincheck token theft.
At this time the company behind the exchange had not revealed the exact date of the incident, but the legal authorities had been informed and all transactions had been frozen. According to the official statement, “internal company checks revealed unauthorized transactions which led to 17 million of Nano tokens shortfall, an amount forming part of the wallet managed by BitGrail’’.
The company however also states on its website that it doesnвЂ™t believe any other tokens were affected by this hack.
4NiceHash — $70 Million stolen
The Slovenia-based company NiceHash specialized in helping crypto currency miners in the purchase or sale of computer capacities provided its transactions in Bitcoins. The miners were not exposed to third-party threats, the main feature of the platform is absence of prepayment, and buyers also are paid in BTC.
В On December 6, 2017 there had been a serious breach in the servers security. Reddit users had reported that they are unable to log in to their accounts or make any transactions — when they tried to log in, everyone had been notified of technical work on the platform. The service platform had undergone a powerful cyber attack as 4, 736, 42 (at the rate of 6.12.2017 the losses amounted to almost $ 70 million) of Bitcoins had been stolen.
Despite the incredibly high losses, NiceHash was able to continue its operations and provide services on crypto currency mining.
CEO and founder Marco Kobal left his post to the project got a new management team. However, with it the company managed to restore the investor confidence quite fast and began to strengthen its protection and defense systems against future intrusions.
5Bifinex — 119,756 Bitcoins ($72,000 millions in 2016) stolen
The Bifinex was the world’s largest crypto currency exchange until it was consumed by ANX.
On August 4, 2016 an unknown group of hackers stole 119,756 Bitcoins (almost $72 million at the exchange rate of the date) from users accounts. The attackers had been able to withdraw tokens from their wallets even despite the multi-layer security system. Hacking occurred through the procedure of execution the multi-entry signature, which allows the transfer of funds. Nevertheless, BitGo announced on its social networks that the violation was not recorded on any of the servers.
In consequence, Bitfinex was transparent about the entire trial and reassured it’s understandably angry customers that they had been working to establish some kind of compensation. The company purchased some of its assets from ICO to pay users, but the stolen money was never tracked. Bitfinex and then manages the transfer of BTC, LTC, ETH, and even Fiat money.
- Date of publication:
- Wed, 02/14/2018 - 00:40
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