So far hackers stole cryptocurrency worth nearly $615 million (€557 million) from a blockchain project linked to the popular online game Axie Infinity, the latest in a series of high-profile cyberheists to hit the digital asset sector in recent years.
Ronin, a network that allows crypto coins to be transferred between blockchains, announced that hackers stole 173,600 Ether tokens and 25.5 million USD Coin tokens on March 23.
The loot was worth approximately $615 million (€557 million) at the time of the announcement, and approximately $540 million (€449 million) at the time of the hack due to a change in the value of the tokens, making the theft one of the largest on record.
These are some of the other major thefts that have plagued the cryptocurrency sector since the birth of Bitcoin (the largest and original cryptocurrency) in 2008.
In August 2021, hackers stole approximately $610 million (€552 million) from Poly Network, a platform that facilitates peer-to-peer token transactions. The heist’s hackers later returned nearly all of the stolen funds. The hack highlighted flaws in the burgeoning decentralized finance – or DeFi – sector, in which users lend, borrow, and save in digital tokens, bypassing traditional financial gatekeepers such as banks and exchanges.
Hackers stole cryptocurrency worth around $530 million (€480 million) from Tokyo-based exchange Coincheck in January 2018. The thieves targeted one of Coincheck’s “hot wallets” – a digital folder stored online – in order to drain the funds, drawing attention to exchange security.
In Japan, the hack raised concerns about the regulation of the digital asset market. South Korea’s intelligence agency speculated at the time that the heist could have been carried out by a North Korean hacking group.
Between 2011 and 2014, bitcoin worth nearly $500 million (€453 million) was stolen from the Mt. Gox exchange in Tokyo – at the time the world’s largest – in one of the earliest and most high-profile crypto hacks.
Mt. Gox, which once handled 80% of the world’s Bitcoin trade, declared bankruptcy in early 2014 after the hack was revealed, resulting in the loss of funds for approximately 24,000 customers.
According to Chainalysis, illicit addresses already hold over $10 billion in cryptocurrencies as of early 2022, with the majority of this held by wallets associated with cryptocurrency theft. In 2021, hackers targeted DeFis the most, providing yet another warning to those interested in this emerging segment of the crypto industry. “DeFi is one of the most exciting areas of the larger cryptocurrency ecosystem, offering enormous opportunities to entrepreneurs and cryptocurrency users alike,” Chainalysis wrote in its annual Crypto Crime report.
In September 2020, KuCoin announced that hackers had obtained private keys to their hot wallets before withdrawing large amounts of Ethereum (ETH), BTC, Litecoin (LTC), Ripple (XRP), Stellar Lumens (XLM), Tron (TRX), and Tether (USDT). A North Korean hacker group, Lazarus Group, has been accused of committing a robbery on cryptocurrency exchange KuCoin, resulting in a $275 million loss of funds. The exchange, on the other hand, was able to recoup approximately $240 million in payments later.
What can you do to avoid cryptocurrency scams?
One of best ways to protect your crypto investment is to secure a wallet.
All Bitcoin’s proactive security measures have reduced the impact of cryptocurrency hacks, but they cannot, unfortunately, prevent a theft.
Enable two-factor authentication on your cryptocurrency wallet and exchange, and never share your private key or seed phrase, keeping that information offline in a cold wallet.
Check the URLs of websites two or three times and only proceed if you are confident in the legitimacy of the crypto project.
Furthermore, any offer that requires an upfront cost, regardless of the amount, should be rejected, especially if the price must be paid in cryptocurrencies.
Do not put your trust in anyone who contacts you personally about investing in Bitcoin or other cryptocurrencies.