Bitcoin came into existence in 2009 as a solution to future Global Financial Crises. The digital coin was established on the blockchain technology offering a decentralized currency to the financial system. However, while Bitcoin and other cryptocurrencies look to solve many financial and payment dilemmas, crypto scams have taken over the crypto industry. And this can be attributed to the fact that enough security is not offered to crypto investors in the crypto market to visit site.
As a result of crypto assets being store digitally, hackers now find it easy to breach security systems and cart away digital coins. Furthermore, given the anonymous nature of the crypto industry, tracking down and identifying these hackers prove to be difficult. Hence, when crypto heists are executed, it’s nearly possible to recover the funds.
In this article, we’ll look at the largest crypto thefts in the crypto industry and how to protect yourself from these heists in the near future.
The biggest cryptocurrency heists in history
A lot of crypto heists have occurred in the crypto industry following the advent of Bitcoin and the crypto industry in general. To name a few, some of the largest crypto heist include MT Gox, Linodez and Poly Network.
My.Gix holds the record is the biggest crypto heist in history with hackers carting away 850 thousand Bitcoin between 2011 and 2014. According to Mt.Gox, the loophole that caused the major loss was an underlying bug in Bitcoin recognised as transaction malleability. This bug alters the unique identifier of transaction by modifying the virtual signature that was employed to generate the transaction.
In September 2011, it was also disclosed that the exchange’s private keys were jeopardize. Not just that, the firm also failed to use any auditing strategy to locate the breach. Likewise, since Mt. Gox often re-use Botcoim address, the stolen keys were easily used to constantly loot new deposits. Hence, by mid 2013, more than 630,000 BTC has been stolen from the exchange platform.
Presently, lots of exchanges now make use of both hot and cold wallets to guard against huge losses as with Mt. Gox. Through this technique, exchanges transfer a larger percentage of their crypto assets to a cold wallet while what’s left is used to run daily operations on the exchange platform.
With this approach, a successful hack into the exchange’s wallet will see the hacker steal only the funds available in the hot wallet. Hence, its left for the crypto exchange to decide how much it is willing to risk.
Linode is web hosting firm that was used by Bitcoin whales and exchanges to store their hot wallets. However, the firm was hacked in 2011 with the hackers targeting the digital services that stored the targeted hot wallets.
Unfortunately for the whales, the crypto exchanges and Linode itself, the hackers successfully stole more than 43,000 Bitcoin. Bitcoin.cx which was among the the exchange affected lost 3,000 BTC while Gavin Andresen, a Bitcoin developer also lost more than 5,000 Bitcoin.
Poly Network also experienced one of the largest crypto heist in history in August 2022 with hackers stealing about $600 million worth of digital coins. The hacker dubbed as “Mr. White Hat” was able to exploit the loopholes in the Defi platform network carting away the digital coins.
However, the narratives surrounding the hack have only got stranger. During the initial theft, Mr. White Hat kept a consistent and public dialogue with Poly Network. Then, after one week following the hack, Mr. White returned the stolen funds except for Tether worth $33 millions. The hacker was unable to the return the Tether since it was frozen by the issuers.
Eventually, Mr. White Hat was awarded a position on the exchange platform to become senior security officer of the exchange. He was also awarded a price of $500,000 from returning the stolen digital coins.
How to avoid cryptocurrency scams?
Being security conscious and protecting your assets is one of the best things you can do for yourself in the crypto market. To do this, you will need to secure a wallet and carry out deep research on projects you’re willing to invest in the market.
Presently, security measures employed by crypto exchanges have all been proactive with the aim of currbing hacks and cyber attacks. Hence, hacks and heist have significantly reduced in the past years. However, there’s little an exchange can do if a user losses his/her private keys to bad actors.
To this end, security responsibilities also fall on users to protect their assets from these bad actors. Therefore, ensure you activate two-factor authentication on your crypto exchange and wallet. Also make sure you do not share your seed phrase and private keys to any third party and keep all data in a cold wallet