Uncovering the Biggest Crypto Heists in History: How Cybercriminals Stole Millions

Cryptocurrencies have revolutionized the ways of making transactions and trades without any dependency on centralized financial entities like banks, thanks to blockchain technology and decentralization. The lack of necessary regulations and the decentralized nature of cryptocurrencies have also made them the ideal target for bad actors and with crypto’s increasing popularity and adoption, the threat of these scams and heists has also increased.
There are several ways to scam and steal cryptocurrencies like phishing, installing malware into users’ devices, creating fake websites and exchanges, and offering money. Sadly, there are fewer chances of recovering these stolen assets or even tracing them.

Biggest Crypto Heists

From crypto newbies to well-known exchange platforms, these hacks and scams have caused huge financial losses to everyone, damaging the reputation of the crypto space. Here we list the biggest crypto hacks and scams in history that plagued the crypto space.

1. MT Gox

With over 850k Bitcoin stolen between 2011 and 2014, the MT GOX robbery is on the top of the list of the biggest crypto thefts in history. Founded in 2010, MT GOX was a Japanese-originated giant crypto exchange of that time, as 70% of total trades and transactions of Bitcoin were handled on this platform. In February 2014, the exchange suspended all trades of Bitcoin declaring it as a technical problem. However, later they announced that they had fallen prey to a crypto hack, resulting in losing over 850,000 Bitcoins, which were worth $450 million at that time.
According to the exchange, a Bitcoin protocol called “transaction malleability” was responsible for the security breach which allowed hackers to manipulate the transaction records, enabling them to move Bitcoin out of the system without being noticed.
The incident also affected Bitcoin’s market price as it crashed to $200 in 2015 after highs of over $1100 in early 2014 before the hack.

MT Gox had to face several lawsuits and they had to declare bankruptcy to repay users. However, the legal process to distribute the assets got halted several times, and many users have yet to receive their lost assets.

2. KuCoin crypto exchange

In September 2020, KuCoin, a Singapore-based crypto exchange became the target of hackers. By exploiting a security vulnerability, the hackers were successful in stealing $280 million worth of Ethereum (ETH), BTC, Ripple (XRP), Stellar Lumens (XLM), Litecoin (LTC), Tron (TRX), and Tether (USDT). When the exchange noticed the breach, it immediately shut all the trading down to contain the attack. The team assured users that their funds were safe with KuCoin and the hack happened due to a vulnerability in the hot wallets.
The exchange successfully traced the crypto assets with the help of law enforcement authorities and agencies and recovered almost $240 million. Later, it was revealed that a North Korean hacker group “Lazarus” was responsible for this hack.

3. Lenode [Is it LEnode or LInode?]

In 2011, when cryptocurrency was still in its early stage and was challenging the traditional centralized financial systems, it faced a major setback. Lenode, a popular hosting firm got hacked. In June 2011, hackers attacked the virtual services that stored the hot wallet data, resulting in the loss of at least 46K Bitcoins — the actual numbers are still unknown.
The hackers expertly installed a rootkit on Linode's servers making themselves anonymous and undetectable while executing the heist.
Following the heist, Linode made several security upgrades including enabling two-factor authentication for users to log in and increasing monitoring of the servers.

4. Coincheck cryptocurrency exchange

Coincheck crypto hack is also one of the biggest hacks in crypto history. Coincheck, a Japanese-based crypto exchange, lost approximately 523 million units of NEM (XEM) cryptocurrency in a crypto hack.
The attack was well-planned and the hackers thoroughly researched their target. The hackers exploited the vulnerabilities in the exchange’s system. Coincheck stored users’ data in hot wallets connected to the internet, making them more vulnerable to scams and hacks. Moreover, the exchange didn’t have any two-factor authentication protocol which would have made the hacking more difficult.
According to Coincheck, the hack was carried out with the help of malware attached to a computer in the management office. Hackers created their own website putting stolen tokens at a 15% discount. The identity of the attackers is still a mystery and the exchange is still unable to determine how exactly this hack was executed. This incident had severe effects on the market price of NEM, and Coincheck had to face about a $500 million loss.

Coincheck promised to reimburse affected customers for lost funds as a result of the hack, but many users are still waiting for the promised funds.

5. Ronin Network

Ronin Network, created by sky Mavis as a part of its popular play-to-earn game Axie Infinity announced on March 23, 2022, that it has been breached by hackers resulting in a loss of $540 million worth in cryptocurrencies.
The hackers compromised the validator keys and transferred the stolen assets to an unknown wallet. Five days after the hack, the Ronin network announced the attack after a user was unable to withdraw 500 Ethereum from the network.
The hack was executed with the help of spyware that enabled the attackers to get hold of 5 of the 9 validator keys. Later, the Ronin network announced on Twitter that the hacker’s private wallet was linked with the popular crypto exchange Binance. However, Binance offered full support to catch the hackers.

Sky Mavis quickly recovered from the attack and made several upgrades to its security system, including moving validator keys to a new infrastructure and monitoring employees’ activities, and also promised to compensate the affected users.

How these scams can be avoided?

Knowing how to secure crypto assets – like using a cold wallet – is important for users. This wallet is not connected to the internet, making it less vulnerable to these crypto scams. These crypto scams can ALSO be avoided by regularly patching security vulnerabilities, activating two-factor authentications, and maintaining up-to-date compliance and regulatory standards.

Conclusion

These crypto hacks are recurring more often with the increasing popularity of cryptocurrency. They highlight the importance of better security measures in the crypto space. New cryptocurrencies are being introduced every day, and anyone can fall a victim to a crypto heist. Businesses must prioritize security in order to protect their customers' wealth.