Cryptocurrencies have transformed financial transactions and investment, with many people having transacted on a crypto exchange at least once. Despite the high levels of anonymity and security offered by blockchain technology, cryptocurrencies are not immune to cybercrime. The past year has seen numerous cryptocurrency hacks, making it important to understand the largest hacks of all time.
Bitcoin was the first cryptocurrency, created in 2009, and since then, cryptocurrencies have experienced problems and crises, with numerous cases of cryptocurrency theft. Billions of dollars worth of crypto have vanished, most of which have never been seen.
Considering the massive amount of money being invested in various projects and tokens, it’s surprising that there haven’t been more cryptocurrency exchange compromises. Bitcoin alone once held a market capitalization of $1.28 trillion, making it one of the hottest assets globally.
The issue of crypto hacks is accentuated by the fact that many people who invest in cryptocurrencies have a limited understanding of the industry, blockchain, and how they work, making them prime targets. Let’s take a look at the largest crypto hacks and the consequences that resulted.
The largest cryptocurrency hack to date happened in March 2022, when hackers stole around $620 million worth of Ethereum and USDC from Ronin Network’s validator nodes of Sky Mavis. Ronin Network and Sky Mavis only discovered the hack when a user could not withdraw crypto from the network. Ronin Network had lowered its security after a big Axi Infinity update a few weeks before the hack, enabling hackers to gain access to private keys of different wallets and fake withdrawals. Ronin Network and Sky Mavis worked with different US government agencies but were unable to retrieve most of the funds. It is believed that North Korean hackers operating from China engineered this crypto hack.
In contrast, the Poly Network hacking incident in August 2021 had a somewhat happy ending. A hacker stole more than $600 million worth of cryptocurrency from the DeFi platform. After establishing communication with the hacker through different online methods, Poly Network got a response and was informed that the stolen crypto would be returned. The hacker only pointed out vulnerabilities in the network and returned all the stolen cryptos. Poly Network even offered the hacker a $500,000 bounty for finding the bug and a position as head of cybersecurity.
Mt. Gox suffered one of the largest-scale crypto hacks in 2011, losing approximately 25,000 Bitcoin worth around $400,000. Hackers managed to hack into the Mt. Gox systems and changed the price of 1 Bitcoin to 1 cent and then purchased many tokens themselves. In 2014, hackers decrypted multiple private keys of Mt. Gox, stealing additional funds. Despite the theft being discovered in 2014, hackers had been taking out Bitcoins from Mt. Gox wallets for the previous 3 years. Mt. Gox managed to retrieve around 200,000 Bitcoin shortly after noticing this hack, but customers still have not seen their crypto back after 8 years.