The world of cryptocurrency is exciting, innovative, and undeniably full of potential. It’s a space that thrives on disruption and holds the promise of a new financial frontier. But this ever-evolving world also has a dark side – ‘The Allure of Easy Money and the Breeding Ground for Hacks.’ Throughout history, the cryptocurrency world has seen various hacks where some cunning individuals have tried to exploit the enthusiasm of the crypto community, often leaving a trail of financial ruin and shattered dreams. In this blog post, we unravel the six Biggest Crypto Hacks in History.
As a curious crypto enthusiast, you might be interested in knowing the biggest crypto hacks in history.
So, buckle up and get yourself ready to take a wild ride through the treacherous landscape of crypto hacks.
1. Mt. Gox in 2011: The First Major Crypto Hack in World
As a veteran crypto enthusiast, you might be aware of Mt. Gox, which was launched in 2010 and was a Japan-based crypto exchange. At that time, Mt. Gox was the largest cryptocurrency exchange in the world. This leading crypto exchange was even handling 70% of Bitcoin transactions solely. However, the good days of Mt. Gox were disrupted when it witnessed a gigantic crypto breach in 2011. Mt. Gox was hacked, which resulted in the stealing of $62,000 worth of Bitcoin. It was one of the biggest crypto hacks at that time.
Witnessing such a gigantic hacking, Jed McCalebb (the founder of Mt. Gox) decided to sell the exchange to Mark Karpeles in 2011.
Between 2012 and 2014, Mt. Gox made several efforts to make a BIG COMEBACK. However, it couldn’t achieve the same success due to the arrival of major cryptocurrency exchanges. Eventually, Mt. Gox had to suspend all trading in February 2014.
A few days after the official suspension, Mt. Gox filed for bankruptcy protection in Japan. In the legal documents, they reported the loss of 100,000 bitcoins, which are worth around $473 million.
In 2015, Mark Karpeles (the CEO of Mt. Gox) was arrested for ignoring various problems that could have saved the exchange. For example, he didn’t grant permission to use any version control software to overwrite the site’s code, which led to the complete crash of their trading charts and website (back in 2014).
Mt. Gox is seeking to refund its users’ money through a Civil Rehabilitation Plan (approved by the Tokyo District Court).
2. Bitfinex in 2016: A Crypto Hack Which Was Smartly Handled
Founded in 2012, Bitfinex is a Hong Kong-based crypto exchange. It is owned by iFinex Inc. (the same company which developed Tether). From its initial days, Bitfinex was creating good hype among investors. But things took a wild turn when Bitfinex was hacked in August 2016.
Hackers stole 119,756 bitcoin (worth around $72 million) in this hack. A few hours later, Bitcoin’s trading value also fell by 20%, creating chaos in the cryptocurrency industry.
A few days later, Bitfinex refunded various customers after they were able to track down some funds. The crypto community highly praised Bitfinix for handling this security breach with maturity.
After three years, the US government finally took the lead in this case by retrieving some of the funds and identifying some of the hackers. Eventually, it was also found that two Israeli brothers were involved in this crypto hack. As a result, they were arrested by higher authorities for cybercrime.
In 2023, Bitfinex sought the help of the Department of Homeland Security to recover around $315,000 worth of Bitcoin.
3. Binance in 2019: A Crypto Hack Which Affected One of the Biggest Names in the Crypto Industry
As the world’s largest crypto exchange by trading volume, Binance is the biggest name in the cryptocurrency industry. Its headquarters are in Cayman Island (a British overseas territory). Binance services are active in over 1200 markets, and it offers trading in over 360 different cryptocurrencies.
Reading up to this point, you might be questioning how such a big name in the crypto industry was involved in a hack.
Well, it’s nothing. As we always say, the Crypto industry is ever-evolving. Anything is possible here. Let’s see how Binance became involved in one of the biggest crypto hacks of all time.
In May 2019, hackers stole over $40 million worth of Bitcoin from the Binance crypto exchange.
The company admitted to becoming a victim of various large-scale cyber-attacks, which ultimately led to the loss of 7,000 bitcoins.
In an official Press Release, Binance said, ‘Hackers were able to even find two-factor authentication codes, which are essential to log into a Binance account.’
‘The major security breach was made to the hot wallet (one of Binance’s leading digital wallets), which accounted for 2% of the total Bitcoin holdings’ – Binance said in the statement.
A few months later, Binance collaborated with SAFU (Secure Asset Fund for Users) to cover all losses and refund all investors.
This is how Binance became a part of one of the biggest crypto hacks in history.
4. KuCoin in 2020: The Biggest Crypto Security Breach of 2020s Decade, So Far
This Singapore-based crypto exchange was founded in 2013. Once often counted as one of the safest crypto exchanges in the world, KuCoin was gaining a good amount of popularity. But it was in September 2020 that this platform became a part of one of the biggest crypto hacks in history.
Hackers stole over $281 million worth of tokens (including Bitcoin & Ethereum) and different Altcoins. After becoming aware of the security breach (a few minutes later), KuCoin blocked all transactions on its trading website. But it was too late, as the damage had already been done.
After a few weeks, the KuCoin management team launched a thorough investigation. This strategic move was well-received by the crypto community. As a result, KuCoin was able to recover around $204 million worth of stolen funds. Even KuCoin was able to find a potential suspect in this attack. It was found that a North Korean hacker group was accountable for this cyber-attack.
KuCoin had to face one of the biggest crypto hacks of all time, but it deserves props for handling this situation so well.
5. Bancor in 2019: The Crypto Hack Which Was Unnoticed, Unheard & Unscathed
Many of you might even know about Bancor. So, let us first introduce you to a little about it.
Bancor is an Israeli crypto start-up that offers its users a fully DEX (Decentralized Exchange) service. It was founded in 2016 and raised $150 million in an ICO (Initial Coin Offering) in one year.
But, in 2019, Bancor was hit by a cyber-attack. As a result, hackers were able to steal $13.5 Million Worth of Tokens ($12.5 Million Worth of Ethereum Tokens & $1 Million Worth of NPXS).
The hackers also tried to steal $10 million worth of BNT (Bancor’s own token). However, upon being notified of the security breach, Bancor was able to freeze its own tokens.
This attack was made via a specific wallet (which Bancor was using to upgrade its smart contracts).
A few weeks later, Bancor launched a thorough investigation. Fortunately, the company was able to identify and track the stolen coins. Upon further research, it was found that the stolen coins had been transferred to different exchanges. Eventually, Bancor requested that all the exchanges freeze the stolen tokens.
At the same time, Bancor also stated, ‘No user wallets have been affected by this attack.’ However, many crypto critics, including Litecoin creator Charlie Lee, called out Bancor for providing incomplete information to its users. Many people on X (formerly Twitter) also question Bancor’s decentralized nature.
6. Cryptopia in 2019: A Chaotic Crypto Hack of Last Decade
Cryptopia was a newly established cryptocurrency exchange based in Canterbury, New Zealand. It was founded by Rob Dawson and Adam Clark in 2014 with the aim of becoming a leading player in the industry. But things didn’t go as expected. On January 14, 2019, Cryptopia suspended its services after experiencing a hacking attack. Earlier, Cryptopia updated all users who were experiencing unscheduled website maintenance. However, when rumors started flowing about Cryptopia becoming a victim of a hacking attack, the exchange company had to come forward to disclose the real information.
New Zealand Police and High-Tech Crimes Unit launched an investigation into this major cyber scam.
In an investigation, Cryptopia admitted to New Zealand Police that 9.4% of their total holdings had been stolen.
On March 20, Cryptopia resumed its trading services for only 40 trade pairs. However, the cryptocurrency exchange couldn’t bear the loss of the hacking attack. As a result, Cryptopia announced the liquidation of its assets on May 15, 2019.
Takeaway
The world of cryptocurrency is exciting and ever-evolving, but as we’ve seen, it’s not without its pitfalls. These historical hacks serve as stark reminders of the importance of vigilance and education. By staying informed of these biggest crypto hacks, you can confidently navigate this world.
As your trusted blockchain guide, we would like to give you one suggestion:
“Never Invest What You Can’t Afford to Lose, and Prioritize Security Over Get-Rich-Quick Schemes.”
The future of cryptocurrency holds immense potential, but it’s up to us to build a safe and secure environment.
With this, we would like to end this blog post, “6 Biggest Crypto Hacks That Took the World by Storm.”
Thanks for reading! Stay tuned for more exciting blockchain-related blog posts.
