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To continue with the Halloween topic, we have prepared five stories about the most notorious crypto exchange hacks in the history of recent years.
Hackers see crypto exchanges as an extremely attractive target, and there have been many high-profile hacks in the twelve-year history of digital coins. Let’s take a look at some of the biggest ones!
#5 Bitcoinica Hack
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- Year: 2021
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- The financial damage caused: more than 120,000 bitcoins
In 2012, Bitcoinica was a popular Bitcoin trading platform owned by Zhou Tong. It was a fairly advanced exchange at the time. However, it lacked security, as it suffered as many as three losses of bitcoins in one year.
On March 1, 2012, an attacker hacked Bitcoinica hot wallets hosted on the Linode server and stole 43,554 bitcoins. On May 11, 2012, another attack took place. This time, the attacker managed to gain access to the exchange database, and he stole 38,000 bitcoins, having obtained confidential user data.Â
In the same year, the platform lost another 40,000 bitcoins stored in secret Mt.Gox accounts. In total, the platform lost more than 120,000 bitcoins, which amounted to approximately $430,000 at the time.
#4 Bitfinex Hack
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- Year: 2016
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- The financial damage caused: 119,756 bitcoins
On August 2, 2016, hackers managed to steal 119,756 bitcoins from the accounts of some users of the Bitfinex crypto exchange, using a vulnerability in the multi-signature Bitfinex and BitGo wallets. The stolen coins were worth $72 million at that time.Â
So far, the exchange has managed to return only 27.7 bitcoins out of almost 120,000 coins. However, within eight months after the incident, the platform compensated all affected users for the damage. The Bitfinex exchange operates successfully to this day, being one of the largest trading platforms.
#3 Mt.Gox Hack
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- Year: 2014
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- The financial damage caused: 850,000 bitcoins ($459 million)
In 2013 and 2014, Mt. Gox was the most popular Bitcoin exchange, which attracted the attention of hackers. The first hacks, which resulted in a loss of approximately $8.75 million, occurred back in 2011. However, in February 2014, the most notorious Bitcoin theft in history took place, as a result of which Mt.Gox filed for bankruptcy. Hidden hacks and thefts continued for three years, going undetected by Mt.Gox employees.
After discovering the hack, the company suspended trading and withdrawals, closed the exchange, and filed for bankruptcy. The company reported that roughly 850,000 bitcoins had been stolen from the exchange’s hot wallets. At that time, 850,000 BTC lost was worth about $473 million and accounted for 7% of all bitcoins in circulation.
#2 Coincheck Hack
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- Year: 2018
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- The financial damage caused: 500,000 XEM (more than $500 million)
In January 2018, the Tokyo-based crypto exchange Coincheck suffered even more financial losses than Mt.Gox. Hackers stole 500 million NEM (XEM) coins from a hot wallet that did not have multi-signature functionality. At the time of the theft, these tokens were worth about $533 million. The Coincheck hack is still the largest theft in terms of the value of coins in US dollars.
#1 Value Overflow Incident
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- Year: 2010
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- The financial damage caused: 184 billion bitcoins out of nothing
If we talked about thefts above, then it seems that the first place in importance should be given to the little-known BTC hack, which could cost humanity all the bitcoins in the world! You probably know that the number of bitcoins is limited to 21 million coins. However, only a few know that on August 15, 2010, in a few hours, there were more than 184 billion bitcoins in the world! Then a hacker who took advantage of an integer overflow error was able to create over 184 billion coins out of nothing.
A violation of the transaction output of block 74638 was detected and corrected in just a few hours. If the development team had not responded in time, the hacker could have dealt a serious blow to Bitcoin’s reputation.
Conclusion
When it comes to selecting a crypto exchange, security should always be the top factor to consider. From the minute you deposit fiat currency in your exchange wallet to the moment you start exchanging, every step of the process has to be secure.Â
Switchere is one of the most reliable online exchanges for buying cryptocurrencies. The company is a licensed financial services provider with guaranteed legal compliance and a secure infrastructure system for fast crypto exchange services at fair prices!
Thus, choose only reliable exchanges, have a great Halloween night, and don’t miss out on a chance to get a 100% discount on a service fee at Switchere!
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