The Biggest Crypto Heists in History [6 Exchange Hacks That Changed Everything]
One unavoidable truth about cryptocurrency investing is that, ironically, it’s not the most secure. The centralized institutions we still rely on have been hacked on several occasions, and large swaths of cryptocurrency have been stolen off of them. While we are seeing improvements, both in security and in the entire reinvention of exchanges, the possibility of millions being stolen at any moment is still looming large.
Since cryptocurrency’s invention, more than $1 billion has been stolen from exchanges. And that’s just how much the stolen crypto was worth at the time of the theft. Now, it would total billions and billions of dollars. Obsessing over these hacks certainly isn’t healthy, but learning more about them and what is being done to prevent future breaches is critical for any crypto investor.
So who was responsible for these hacks? Are there cyber crime organizations?
Fear not, cyber crime organizations aren’t finding their way into your backyard. But also fear a little, since there is some evidence that there are major hacking groups targeting cryptocurrency. Chainalysis, a crypto company that deals with cybercrime in the blockchain world, has some statistics on the matter:
“Hacking dwarfs all other forms of crypto crime, and it is dominated by two prominent, professional hacking groups. Together, these two groups are responsible for stealing around $1 billion to date, at least 60% of all publicly reported hacks.”
According to Chainalysis’ report, one of the groups is a large, very well organized, and partially non-monetary organization, while the other group is smaller, less structured, and entirely focused on the money.
The largest crypto hacks in history are not only terrifying, but are also good lessons for the crypto world to learn. So here are the six largest cryptocurrency hacks of all time:
Table of Contents
Biggest crypto Hacks in history
Mt Gox Hack – Feb. 2014
The Mt. Gox hack is probably the most notable, yet not the largest, crypto hack in history. At the time, Mt. Gox was the largest cryptocurrency exchange platform by a large margin. Fun fact: Mt. Gox was originally Magic: the Gathering Online exchange, and was intended for players of Magic: the Gathering Online to buy and sell cards like stocks.
Unfortunately for Mt. Gox, they were hacked in February of 2014, and the hackers made off with 740,000 BTC, worth more than $450,000,000 USD then, and over $8,000,000,000 USD today. Owners of these cryptocurrencies have still not been refunded their crypto, despite more than 200,000 BTC eventually being recovered. Not only was this hack disastrous for those who had their Bitcoin stolen, but it shook the foundation of the crypto world, and the price of BTC fell 50% nearly instantaneously.
Coincheck Hack – Jan. 2018
The Coincheck hack of January, 2018 is the largest cryptocurrency hack by dollar amount stolen, a staggering $530,000,000 USD, and people were none too happy. Coincheck made something of an amateur mistake; holding all cryptocurrencies in the same hot wallet. It is standard practice for exchanges to hold them in a combination of hot and cold wallets, or using a multisig system to safeguard the assets.
Unlike Mt. Gox, Coincheck took the blame for this hack and refunded all funds to their users. At the time of the breach, NEM, the cryptocurrency that was stolen, was worth are $1 per coin. Now, it is worth only about $0.08. If the hackers held onto all that NEM, which I can’t imagine they did, it would only be worth around $42,000,000. Not that that isn’t a lot of money, of course, but it’s not quite $530,000,000 now is it…
Bitgrail – Fec. 2018
The Bitgrail hack of February 2018, just like the previous Coincheck hack, took place in the wake of the great crypto crash of early 2018. While the Coincheck hack was controversial, it doesn’t even come close to the controversy surrounding the Bitgrail hack, which saw $180,000,000 USD worth of NANO stolen.
Since then, the founder of Bitgrail, Francesco Firano, has been under heavy criticism, as the company’s practices and this hack led many to believe that this wasn’t a heist, but rather an exist strategy by Firano and his friends. After a brief, less than 24 hour return in mid 2018, Bitgrail has been down ever since. And as many might say, long may it continue.
Bitfinex – Aug 2016
More than $60,000,000 USD was stolen off of the Bitfinex exchange in August, 2016. Bitfinex is something of a controversial cryptocurrency exchange. Their past few years have been marred with accusations of shady dealings and unethical practices. This hack is arguably their biggest problem, but that could change. In April, 2019, New York Attorney General Letitia James filed a suit that accuses Bitfinex of using Tether reserves to cover an $850,000,000 USD loss owed to a Panamanian company. A notable American face associated with this Panamanian company was indicted later that month for cryptocurrency-related illegal activities. So if you think the August, 2016 hack was the biggest issue Bitfinex will ever deal with, there may be another, even larger issue on the horizon.
Zaif – Sep 2018
Another $60,000,000 USD hack, Japan-based Zaif was broken into in September, 2018. While certainly a massive amount of stolen tokens, Zaif has bounced back rather well. There are very few, if any, accusations of wrongdoing by Zaif, and many supporters firmly believe that Zaif’s long-term future is still very bright.
Binance – May 2019
Binance fully covered the losses of its users following this recent hack, but it still was astonishing to see that even the biggest exchanges can still hlwayave its security weaknesses. We hope at least that other exchanges put in place systems to protect their users as Binance did with their project SAFU (Secure Asset Fund for Users) that is that sets aside 10% of fees in order to possibly refund users should this sort of breach ever happen again. Also, it makes for a fantastic meme…
While cryptocurrency investing and trading is the most exciting way to make a ton of money, it isn’t necessarily the most secure. Exchanges have been hacked on numerous occasions before, and there are likely to be more in the future. However, there are ways of solving this. Binance’s solution, SAFU, is a fantastic way of doing just this. Alternatively, the decentralized exchanges that are starting to make a name for themselves could be the much safer and more secure exchanges going forward.