Learn 5 Crypto hacks – While global cryptocurrency markets have grown by over 21,000 percent since 2016, the journey has not been without its bumps. Apart from the inherent volatility and uncertainty of the industry, the cryptocurrency market has been the victim of various well-publicized crypto thefts and cyber security breaches. While each of these hacks was unique, there was something to be learned from each of them.
Let’s take a look at the top five crypto hacks from which exchanges and traders can learn lessons and appreciate the responsibilities that come with handling millions of dollars in crypto assets:
The Crypto Heist on the Ronin Network, March 2022 – Crypto hack
The $625 million crypto heist on the Ronin network, which is home to Axie Infinity, is the most recent and largest in cryptocurrency network history. The gaming-focused network reported a loss of 173,600 ether and 25.5 million USDC in the exploit, which is worth hundreds of millions of dollars.
How did it happen?
The Ronin sidechain contains nine validators on its chain, and withdrawals require five signatures. To safeguard the blockchain from these threats, a security arrangement has been put in place. However, the attacker gained access to Ronin’s gas-free RPC node via a backdoor. The Axie DAO validator signature was obtained by abusing the node. The attacker utilised compromised private keys to fabricate fraudulent withdrawals from the Ronin Bridge across two transactions, according to Etherscan. The vulnerability affected Sky Mavis’ validator nodes, which are in charge of publishing the Axie Infinity and Axie DAO games.
The attack was carried out using a new address that received ETH from the Binance exchange a week before the attack. The majority of the loot remains in the attacker’s account, with the exception of 6,250 ETH being transferred to various other addresses. Ronin Network and Katana AMM have been suspended until the results of the investigation.
August 2021, The Poly Network Hack – Crypto hack
Poly Network Hack is one of the greatest and most recent crypto hacks. On August 10, 2021, approximately $611 million in crypto assets were stolen from Poly Network – a smart contract platform that allows users to swap tokens between blockchains such as Ethereum and Bitcoin.
How did it happen?
The attacker was able to gain access to Poly Network’s security and buy tokens without selling them on other blockchains. The hackers returned the assets within a week, except for $33 million in USDT, which was blocked shortly after the attack. The hack was reportedly done for ‘fun’. However, the breach exposed flaws in the current DeFi system, and experts feel that there are lessons to be learned in order to improve the security of the DeFi ecosystem.
The January 2018 CoinCheck Hack
In January 2018, hackers hacked Coincheck Inc. Broke into the exchange’s systems and stole hundreds of millions of dollars worth of NEM tokens totaling $547 million. Coincheck Inc. disclosed a security breach but denies it was the result of an insider attack.
How did it happen?
Customers’ crypto assets are usually kept in cold wallets that are not connected to the internet, but Coincheck kept them in hot wallets, which are vulnerable to external attacks. Furthermore, the exchange lacks multi-signatures as an added degree of wallet security.
The 11 addresses to which the stolen NEM tokens were sent were tracked down, but no one knew to whom the addresses belonged. Tags _accept business: The owner of this account is the hacker applied to each address. The creators of the NEM protocol have created a tracking tool to help exchanges reject any trades using these stolen funds.
The February 2014 Mt. Gox Crypto Heist
This crypto hack was the most famous attack on a Japanese exchange Mount Gox. The total cost of the robbery was $480 million, entirely in bitcoins. Over 850,000 bitcoins are thought to have been stolen or lost, accounting for about 7% of all bitcoins in circulation. Today their value will be in billions.
How Did it happen?
The site was created in 2010 as a place to trade cards from the game ‘Magic the Gathering’. As of 2014, the exchange had processed 70% of all bitcoin transactions. The exchange immediately ceased operations, terminated its services, and filed for bankruptcy in February 2014. Despite years of questioning, the perpetrator could not be identified, and it was determined that the Mount Gox hack was the work of an outsider.
September 2020, KuCoin crypto hack
In September 2020, the Singapore-based KuCoin exchange was hacked for $275 million in cryptocurrency. ERC20 tokens, which are used in Ethereum smart contracts, were stolen in the amount of $127 million.
How Did it happen?
Another incident in which the exchange’s loose security was partly to blame for theft. The hackers were able to launch the attack by gaining access to the private keys of the hot wallet of the exchange. Most of the assets were eventually recovered, including 15% of the stolen money covered by KuCoin’s insurance. There was no damage to any property of the customers.
While cyber security will always be a concern, as a trader you can take several steps to protect your assets. The initial step in this process is to select a reputable crypto exchange, such as WazirX. Check that the exchange’s security features, including multi-signature wallets, two-factor authentication, KYC checks and other anti-money laundering measures, are in place.
Next, check to see if the exchange uses hot wallets to store its customers’ cash. If you are not trading your crypto assets regularly, move them to an offline wallet or hardware wallet as a preventive step.
Never give your private keys to anyone else. Verify the legitimacy of the initiative in which you are investing your money. Invest in crypto projects that have been fully audited in Ordinary Funds. Lastly, check to see if the exchange you are using to facilitate your crypto trading has insurance to cover losses in the event of a hack or cyberattack.
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