These are Top 3 Largest Cryptocurrency Hacks in History
Top 3 Largest Cryptocurrency Hacks in History: Cryptocurrencies have revolutionized financial transactions and investments. Most individuals have participated in a crypto exchange at least once in their lifetime.
Crypto-assets can potentially make individuals millionaires in a flash, but the blockchain technology behind them – which offers substantial anonymity and security – isn’t immune to cybercrime. In the past year, there have been various reports of colossal crypto breaches, as highlighted in this blog.
Cryptocurrencies have been in existence for a relatively long period now. Bitcoin, the first and largest, was founded in 2009.
So, it is understandable that such new technologies have faced numerous challenges and faced setbacks due to the incidence of theft and hacking of crypto-assets.
For example, in its heyday, Bitcoin alone was valued at an eye-watering market capitalization of $1.28 trillion and its unrivaled security provided by blockchain technology only made it even more appealing to investors.
This in turn, combined with the ignorance of many crypto-investors about blockchain, made them easy targets for hacking, leading to a series of high-profile crypto hacks, some of which have been the biggest of all time.
Let’s take a closer look at what has occurred in these incidents and the impact that they have had.
Ronin Network was funded with an incredible $625 million.
In spite of the vast potential of crypto-assets to enrich investors, the blockchain technology that underlies them is still susceptible to cybercrime, as evidenced by the Top 3 Largest Cryptocurrency Hacks in History.
Over the past year, cybercriminals have exploited vulnerabilities with their advanced techniques to raid digital wallets and purloin significant sums, leaving investors aghast and confounded.
According to Ronin Network, this heist compromised the validator nodes of Sky Mavis, the programmer of Axi Infinity, a top crypto game of that era.
What’s worse is that neither Ronin Network nor Sky Mavis was aware that the breach had occurred until one individual reported they could not withdraw their digital money from the system.
The vulnerability that enabled the hack became even more clear as, shortly before, Ronin Network had decreased its security level due to the rollout of a big Axi Infinity update.
Hackers used this chance to gain access to wallets’ private keys and falsify transfers. This would have been avoidable if Ronin Network had maintained higher security protocols to release the update.
Afterward, Ronin Network and Sky Mavis collaborated with multiple U.S. authorities in a bid to recover the stolen assets but could not get back any major amounts. Binance, on the other hand, retrieved $5.8 million, a trifling sum in comparison.
Upon conclusion of the investigation, North Korean cyber criminals working out of China were suspected to be the perpetrators of the theft, leaving the U.S. powerless to act.
Poly Network was funded with an incredible $611 million.
Not every hack needs to have a sorrowful conclusion, and the Poly Network hacking episode is a perfect case of that. This hack occurred on August 10th, 2021, when a cyber criminal effectively stole more than $600 million worth of cryptocurrency from the Defi platform.
As per the reports, the hack may have resulted from an unintentional disclosure of the private keys that were employed to authenticate transactions on the Poly Network wallets.
Further reports detailed that the hacker exploited a bug in the Poly Network code that permitted them to sign transactions without requiring any private keys.
All in all, about $611 million worth of crypto vanished, including tokens such as wrapped Ethereum and Bitcoin, USDT, and Shiba Inu.
To trace and track the stolen assets, Poly Network shared the address of the crypto wallets where funds were transferred and encouraged different exchanges and networks to be vigilant. This eventually resulted in Tether freezing around $33 million of USDT.
Fortunately, this story has a satisfying outcome. After the hacking incident, Poly Network attempted to establish contact with the hacker through various online channels, and remarkably, they received a response.
The hacker declared that they meant to return all the stolen cryptos and only wanted to reveal the network’s vulnerabilities.
Following this, the hacker started the process of restoring the stolen funds and by August 13th, had returned around $340 million worth of crypto, with the leftover tokens being shared between Poly Networks and the hacker through multi-signature wallets.
By August 25, Poly Network was back in the ownership of all the $611 million worth of crypto and offered the hacker a bounty of $500,000 for locating the bug.
Additionally, they also extended the offer for a position as head of cyber security to the hacker, although it remains unknown whether the offer was accepted.
The infamous Mt. Gox-$473 million
One of the most memorable cyber-attacks to ever occur in the cryptocurrency industry happened in 2011, when Mt. Gox, then one of the world’s largest crypto exchanges, suffered the loss of roughly 25,000 Bitcoin which had an equivalent value of $400,000 at the time.
However, this event wasn’t a learning experience for Mt. Gox as the same year, hackers made away with an extra 650,000 Bitcoin from customers, and 100,000 from the exchange itself, valued at around $473 million.
During the 2011 attack, cybercriminals managed to exploit Mt. Gox’s security system, manipulating the price of one Bitcoin to just one cent, allowing some users to capitalize on this price manipulation.
Post-2011, Mt. Gox claimed to have heightened its security protocols but it soon fell victim to another hack in 2014.
After further investigation, it was found that the 2011 attack was responsible for the decryption of numerous Mt. Gox private keys that were then used to extract the subsequent funds in 2014.
What is so perplexing about the 2014 attack is that it went on undetected for over three years. Speculations have been made that by 2013, Mt. Gox had already been robbed of the majority of their Bitcoin, yet nothing was ever done about it.
Ex-employees have even claimed that Mt. Gox’s lack of management is to blame for this as it allowed the hackers to steal cryptocurrency unnoticed for an extensive amount of time.
Following the hack’s discovery, it is reported that Mt. Gox was able to recuperate around 200,000 Bitcoin but unfortunately, the customers are still yet to get their crypto back after eight long years.