One thing holding digital currency back from being adopted by the mainstream has been hacking. There have been a number of high-profile thefts on various cryptocurrency exchanges and platforms, which scares potential investors away.
The series of back-to-back attacks in 2022 led many to believe that blockchain projects were no longer secure. To date, $1.6 billion worth of cryptocurrency has been stolen from users in 2022 alone, according to the Chainalysis blockchain data platform. These are some of the largest crypto hacks occurred thus far.
Ronin Network: $625 Million
The biggest cryptocurrency hack to date was in March 2022, and it hit the network that supports the popular Axie Infinity blockchain gaming platform. Hackers breached the Ronin Network and took around $625 million worth of Ethereum and USDC stablecoin. The U.S. officials said Lazarus Group, a North Korean state-backed hacking collective, was linked to the theft. Binance recovered $5.8 million of stolen funds a month later, but it would still be largest hack on record at that time.
Poly Network: $611 Million
When the Poly Network decentralized finance platform was hacked in August 2021, the anonymous hacker stole over $600 million. The project’s developers put out a plea on Twitter for return of the funds, which included $33 million Tether. Several addresses were created by Poly Network for where the money could be sent back, and surprisingly, the hacker began to cooperate. In only two days’ time, approximately $300 million had been recouped. Later it was revealed that targeting the network “for fun” or as sort of challenge might have been motivation behind taking action.
FTX: $600 Million
In November 2022, FTX declared bankruptcy and more than $600 million was stolen from its crypto wallets. Many FTX wallet holders reported that their balances were erased. The crypto exchange confirmed the hack on its Telegram channel, saying: ”FTX has been hacked. FTX apps are malware.’ Delete your account information from the chat. It is open. Do not go on the FTX website as it may download Trojans.” Miller later tweeted that the crypto exchange was taking “every measure to secure all assets, no matter where they are located.
Binance: $570 million
The Binance exchange was hacked for $570 million in October 2022 in one of the most well-known attacks against cryptocurrency. By taking advantage of a cross-chain bridge, called BSC Token Hub, hackers were able to create extra Binance Coins (BNB) and withdraw 2 million tokens. The hack occurred because of a bug in a smart contract, which emphasizes the importance of stronger security measures surrounding blockchain technology.
Coincheck: $534 Million
The Japanese exchange Coincheck was hacked in January 2018, with the thieves making off with $523 million worth of NEM coins. The hack exploit a vulnerability in the exchange’s hot wallet – which is a live cryptocurrency wallet that’s not as secure as an offline cold storage wallet. At the time, the Coincheck hack was larger even than the notorious Mt. Gox hack.; The NEM Foundation president, Lon Wong, referred to it as “the biggest theft in the history of the world.” Despite this hack, Coincheck was able to keep running and was eventually bought out a few months later by Monex Group.
Mt. Gox: $473 Million
In 2011, Mt. Gox- a crypto exchange at the time handling nearly 70% of all bitcoin transactions- lost 25,000 bitcoins in an attack which amounted to $400,000. Just three years later in 2014, they were hit again; this time losing almost 650,000 customer bitcoins and 100,00 of their own– 7% of all Bitcoins at the time totaling around $473 million . The initial coins’ disappearance was due to unclear reasons but evidence arose pointing to them being stolen from the company’s ‘hot wallet’.
Wormhole: $325 Million
In February 2022, the decentralized finance platform Wormhole was hacked and $325 million was taken by the attackers. The attack had been made possible by an upgrade to the project’s GitHub repository, which was not yet deployed to the live project. The popular cryptocurrency bridge had to plug the hole in the project’s finances afterthe funds were not recovered. This theft also included Solana, one of Ethereum’s rivals in terms of DeFi and NFTs. Up to $47 million worth of Solana’s native SOL tokenwas taken in this blockchain-related theft, making it one ofthe largest thefts recorded at that time.
Bitmart: $196 Million
In December 2021, the Bitmart centralized exchange was hacked and losses totaled $196 million. A security analysis firm discovered inconsistencies with various account balances and activity logs before alerting Bitmart officials. An estimated $100 million in cryptocurrency assets were transferred out of accounts and wallets affiliated with Bitmart using Ethereum blockchain technology. Another $96 million in value left the platform via Binance Smart Chain transactions. Etherscan, a popular analytics resource for cryptocurrency data,labeled the receiving wallet associated with all of the stolen funds as belonging to the “BitMart Hacker.”
Nomad Bridge: $190 Million
The Wintermute breach occurred one month after hackers stole $190 million from Nomad Bridge, a cryptocurrency bridge that allows users to swap tokens between blockchains. These types of projects have become the latest target for hackers due to the considerable value of assets they hold and the complexity of the smart contract code on which they run. In total, Nomad Bridge later recovered $36 million of the stolen funds.
Beanstalk: $182 Million
This involves the exploitation of a DeFi platform through flash loans. In thirteen seconds, the hacker borrowed $1 billion, took control of 67% stake in the project, approved a transfer of funds to their wallet before repaying the loan and disappearing.
Wintermute: $162 Million
In September 2022, Wintermute, a leading cryptocurrency market maker, was attacked. The project lost around $160 million in the hack, and things got worse for Wintermute because they then owed $200 million to other participants in the market. In an attempt to get their funds back, the CEO offered a 10% bounty to the hacker if they returned the stolen money.
Developments in the cryptocurrency industry have recently caused it to grow at an exponential rate; however, this may not be entirely positive. Along with new products comes more hacking attempts on blockchain networks. These hacks show just how vulnerable the crypto industry is and has led investors to lose confidence. To prevent sentiment from deteriorating any further, developers need to work on increasing security measures for blockchain networks.