Cryptocurrencies have revolutionized the finance industry. These virtual currencies made us aware of the importance of anonymity and enabled consumers to have full control over their funds.
However, we are still adapting to the crypto industry and finding ways to improve it. As the crypto ecosystem is digital- or Internet- based, there is a greater risk of your funds being stolen by a third party or a hacker compared to keeping your physical money in the bank. This is why many people are reluctant to invest in crypto assets.
In this article, I share the top 5 cryptocurrency exchange hacks to date.
- Cryptocurrencies are revolutionary and can change the concept of finance
- We are still adapting to the crypto industry and finding ways to make it perfect
- The risk of having funds stolen is more significant than keeping your money in the bank
- Coincheck was subject to the biggest crypto hack of all time - $547 million stolen
- Choose a crypto exchange that guarantees the safety of your funds, or store your assets in a hardware wallet
#1: Coincheck Hack - US$547 Million stolen
The Coincheck hack in 2018 is considered one of the biggest heists of all time, with hackers making off with US$547 million. Launched in 2012, Coincheck was one of the oldest cryptocurrency exchanges and one of the biggest in Japan before making a name for itself globally. Investigators found that the funds were stored in Coincheck’s hot wallets, making them accessible through the internet and vulnerable to theft.
#2: Mt. Gox Hack - Around US$500 Million stolen
Launched in 2010, Japanese cryptocurrency exchange Mt. Gox was hacked several times, losing an estimated US$5 million. In 2014, when the exchange was reportedly managing over 70% of global Bitcoin transactions, Mt. Gox was hacked anew with hackers stealing 850,000 Bitcoins worth close to US$500 million. The CEO of Mt. Gox was arrested on suspicion of involvement in the hack but was released later on after the investigations ended.
#3: KuCoin Hack - US$280 Million stolen
KuCoin, one of the most popular cryptocurrency exchanges, was hacked in 2020. Around US$280 million in cryptocurrencies were stolen, almost half of which were Ethereum-based. As with Coincheck, the cryptocurrencies were stolen from KuCoin’s hot wallets. Fortunately, KuCoin was able to recover all but 17% of the hacked cryptocurrencies. All affected users were reimbursed, and the exchange is still going strong today.
#4: Bitgrail Hack - US$150 Million stolen
Bitgrail was hacked in 2018, draining around US$150 million from the Italy-based cryptocurrency exchange. The exchange ceased operations after the hack and was not able to reimburse affected customers. Controversy erupted after an Italian court concluded that the funds from the exchange were moved to another wallet months before the claimed hack, spawning suspicion among the public that the heist was planned by the Bitgrail owners.
#5: Binance Hack - US$40 Million stolen
Immensely popular cryptocurrency exchange Binance was hacked in 2019 that resulted in the loss of around US$40 million worth of cryptocurrencies. While Binance was able to reimburse affected users, the hack exposed gaps in the exchange’s security features.
As long as we are on the internet and the exchanges keep storing the funds in hot wallets, there will always be risks for hacks and breaching attempts. What can you do? You can choose a trusted cryptocurrency exchange that guarantees the safety of your funds, has insurance, and the right security methods to protect your investments.
You can also opt to store your crypto in cold storage using a hardware wallet such as a Ledger or Trezor, where it is disconnected from the internet.
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