14 Latest Crypto Hacks and Digital Heists you Must Know

Crypto Hacks and Digital Heist

When Satoshi Nakamoto, the fictitious creator of Bitcoin, mined the first block in 2009, the cryptocurrency was officially unveiled to the world. By 2020, cryptocurrencies and blockchains will still be widely used by a small, tech-savvy segment of the population, but they won’t be accepted by the general public. Hackers will begin to target these systems using bitcoin hacking tools and software while operating from bitcoin hacking forums and websites. Twelve years in the world of technology is a long time.

To put this into perspective, the manner that cellular technology is created has evolved drastically since Apple initially unveiled the iPhone in 2007. However, compared to traditional currencies, which took much longer to reach this point, cryptocurrencies have hardly advanced past this point. Despite the fact that there are numerous constraints inhibiting mainstream adoption of cryptocurrencies, including a lack of consumer understanding of cryptocurrencies and an unregulated market, one of the most significant ones is the danger connected with digital tokens. In addition to the fact that digital tokens are prone to volatility, there is also the risk that they could be taken.

Bitcoin hacking scam involves hacking a bitcoin private key through a bitcoin hack generator. Hackers have become more savvy and unrelenting in their assaults, while Bitcoin wallets have become more sophisticated to deal with them. The following are two notable crypto hacks and digital heists that impacted the ecosystem.

The Importance of Understanding Crypto Hacks

One of the foremost questions that come to mind when you search for the biggest crypto hacks revolves around blockchain technology. Isn’t blockchain supposed to offer cryptographic security? While blockchain has been tailored to offer decentralization, scalability, and security, it can struggle to balance all three value factors.

At the same time, blockchain applications such as cryptocurrencies impose the responsibility of application and asset security on the user itself. Therefore, a small error on behalf of users could lead to breaches and loss of assets. The sheer volume of crypto hacks every year showcases the urgency for learning more about them and determining safety measures.

On top of it, hackers also seek vulnerabilities in the code underlying blockchain and crypto applications. For example, hackers exploited the software vulnerability of a web3 music platform, Audius, and compromised $1.1 million worth of assets. Within the first half of 2022, crypto hacks had resulted in the loss of almost $2 billion. Alarmingly, the number has increased to $3 billion by October 2022, with around 125 crypto hacks. As cryptocurrency hacks continue to increase in magnitude and severity, the total losses to crypto hacks in 2022 might surpass the $3.2 billion mark set in 2021.

Latest Crypto Hacks and Digital Heist in Recent Times

The losses due to crypto hacks continue climbing higher with each passing year. According to the findings of Chainlist, centralized exchanges have always been the primary targets of crypto hacks. However, DeFi platforms emerged as the new victims of hackers, especially due to their dependence on smart contract codes.

Therefore, an overview of the notable crypto hacks could offer a clear impression of what went wrong with the protocols. In addition, you can also learn about the recovery of protocols from newest crypto hacks and obtain insights regarding security. Here is an outline of the notable crypto hacks so far, with a detailed description of all associated events.

Axie Infinity Ronin Bridge

One of the most notable entries among crypto hacks in 2022 would refer to the $625 million hack on Ronin Network. Hackers compromised access to many of the cryptographic keys used for the security of the cross-chain bridge of Axie Infinity. Apparently, an Axie developer clicked on a fraudulent job offer in the form of a PDF. The attacker stole four out of the nine private keys used for authenticating transactions and transferred around 25.5 million USDC and 173,600 ETH to their wallets.

The network discovered the hack upon the efforts of a customer to make a legitimate withdrawal. According to Sky Mavis, the founders of Axie Infinity, they have employed the assistance of forensic cryptographers, law enforcement officials, and investors to avoid any further loss of funds. Following the attack, the Ronin Bridge introduced more validators, albeit with a humongous loss of user trust.

Crypto.com

Another prominent example in the cryptocurrency hacks list would refer to the popular centralized exchange Crypto.com. It suffered a loss of $35 million in a cryptocurrency hack on January 17, 2022. What was the cause behind the Crypto.com hack? The answer was evident in the disabled two-factor authentication. Hackers had disabled the integral identity verification mechanism and transferred Bitcoin and Ether from the accounts of customers.

On the other hand, the CEO of Crypto.com had initially denied the loss of funds in the crypto hack. However, the exchange had to acknowledge the hack a few days later. In response to the attack, the company has planned to introduce multi-factor authentication for user credentials.

Gox: The World’s Biggest Bitcoin Robbery

Established in 2010 by U.S. software engineer Jed McCaleb, Mt. Gox controlled almost 70% of all Bitcoin exchanges at its top in 2013 and 2014 preceding failing. The trade endured its first assault in March 2011, when 80,000 Bitcoins were taken while the then 8-month-old trade was going through a possession change. As per a new report by Bitcoin.com, Australian PC researcher Craig Wright, who has freely professed to be Satoshi Nakamoto already however neglected to persuade the crypto local area, cases to possess the location containing the 80,000 Bitcoins taken from Mt. Gox in the primary assault.

McCaleb offered the trade to French Bitcoin devotee Mark Karpeles, and was qualified for a portion of income and held director controls to review profit. This made ready for the second assault on June 19, 2011, when McCaleb’s administrator account was hacked and used to falsely drop the cost of Bitcoin from $17 to a penny, which prompted around 2000 bitcoins to be purchased and moved out of the trade before the assault was seen and settled. The main assault, notwithstanding, was the one that occurred across years, somewhere in the range of 2011 and 2014, which brought about the deficiency of 744,408 clients possessed and 100,000 Mt. Gox-claimed bitcoins, alongside $27 million money from Mt. Gox, making it the biggest crypto heist ever.

Bitcoin hacker is also interested in bitcoin mining and is learning how to mine bitcoin through bitcoin mining software or bitcoin mining rig and keep a count of it using a bitcoin mining calculator. As per Blockonomi, the June assault might have prompted the robbery of the Mt. Gox private key when the programmers may have accessed the trade’s decoded wallet.dat document. With the assistance of the record, the programmers had the option to continuously redirect Bitcoins without being identified, since Mt. Gox’s frameworks deciphered it as stores being moved to more secure locations.

A month subsequent to bowing out of all financial obligations, the trade reported that it had discovered 200,000 Bitcoins in old-design computerized wallets that had been utilized by the trade under McCaleb’s residency. Karpeles is entangled in a functioning claim even today, as Mt. Gox clients are as yet anticipating pay. The taken coins were valued at almost a large portion of 1,000,000 dollars when the burglary became known in February of 2014, while the worth of the almost 650,000 missing coins is more than $7.5 billion today.

Nicehash Scam

NiceHash allows people to mine cryptocurrencies like Bitcoin with their spare GPU strength. On December 6, 2017, hackers from outside Europe gained access to the computers of the Slovenian startup and stole the credentials of a NiceHash engineer. They then hacked into the payment system and depleted the NiceHash Bitcoin wallet. According to a Coindesk survey, the attackers took 4,736.42 bitcoins worth $62 million at the time, or $54.87 million at today’s rates. Within two weeks, NiceHash’s website was back up, and the company agreed to refund customers. NiceHash had returned nearly 60% of the coins stolen in the hack by August 2018, and nearly 80% by January 2020. The former co-founder and CTO of NiceHash were arrested in Germany in October 2019 on the US charges that he was a member of a hacking ring that stole millions of dollars.

Binance

The next addition among top crypto hacks in recent times would point to the case of the Binance exchange. With a loss of $570 million, the Binance exchange hack in October 2022 emerged as one of the high-profile attacks. The root of the hack was the BSC Token Hub, a cross-chain bridge. Hackers exploited the bridge and created additional BNB tokens, followed by withdrawing 2 million BNB tokens. The hack pointed out the necessity for refining blockchain security further with an emphasis on resolving security bugs in smart contract code.

IRA Financial Trust

The IRA Financial Trust also incurred a loss of almost $37 million in a crypto hack on February 8, 2022. It is a crypto-based retirement and pension disbursal system with the potential to encourage mainstream adoption of cryptocurrencies. However, hackers compromised assets on the platform by accessing a master key, which helped them overcome all the security measures.

The response of IRA Financial Trust towards the hack was directed toward Gemini. Apparently, the IRA Financial Trust used the services of Gemini crypto exchange for storing customer funds. The crypto exchange has been accused of negligence leading to the hack, thereby calling for security improvements.

Wormhole

The list of largest crypto hacks so far would also draw the limelight on Wormhole, a DeFi application. Wormhole worked as a Solana to Ethereum bridge and incurred losses worth $325 million in a crypto hack on February 2, 2022. Hackers had exploited the smart contracts on the platform for minting and cashing out wrapped Ether without any collateral deposits.

The smart contract vulnerability was possible due to an upgrade to the GitHub repository of the protocol, which had not been implemented in the live project. The Wormhole hack apparently qualified as the biggest theft of Solana, one of the notable competitors to Ethereum, with a loss of $47 million worth of SOL tokens.

Subsequently, the network had to replenish the assets on the project in the lack of recovery of the funds. The venture capital firm backing the Wormhole protocol, i.e., Jump Crypto, maintained the solvency of the affected Solana-based platforms. In addition, Wormhole also changed the name of its bridge to “Portal.” As of now, the DeFi platform holds around $480 million worth of assets.

Qubit QBridge

The Qubit QBridge hack also garnered headlines in January 2022, with losses amounting to almost $80 million. It is one of the biggest crypto hacks which showcase the exploitation of vulnerabilities in smart contract code. Hackers manipulated the smart contract bug on QBridge by Binance-based Qubit Finance, like the case of the Wormhole hack.

The hackers were able to mint wrapped Ether tokens without having to deposit any collateral. On the other hand, the response of Qubit Finance to the hack serves as a proven reference for recovering from hacks. The Qubit Finance developer team reduced the staff behind the protocol and reimagined the platform as a DAO or decentralized autonomous organization.

Beanstalk

The overview of different cryptocurrency hacks noted in recent times would also include the hack on Beanstalk. As a matter of fact, the exploitation of Beanstalk showed how ‘flash loans‘ can serve as a vulnerability for DeFi platforms. The hacker exploited the Beanstalk DeFi platform by borrowing a flash loan of $1 billion. Flash loans are an innovative and helpful DeFi product that helps users in borrowing cryptocurrency for smaller periods of time. The hacker introduced a proposal for donating funds to Ukraine and passed it, inviting users to deposit collateral in the project.

Then, the hacker used the $1 billion flash loan to assume a 67% controlling stake in the project. After gaining a majority stake, the hackers approved fund transfers to the crypto wallets without loan repayment. Interestingly, the time required for the execution of the hack was only 13 seconds. The response of developers to the hack focused on pausing the protocol operations alongside conducting audits. In addition, Beanstalk is also working on collecting the required amount of funds with plans for reopening deposits.

Nomad Token Bridge

The Nomad Token Bridge hack also accounts for one of the biggest crypto-hacks, with a loss of almost $190 million. The cross-chain protocol bled cryptocurrencies within a few hours and led to formidable damage. Apparently, the hack was traced back to vulnerabilities introduced in the protocol through a routine update. Hackers exploited the vulnerability for transferring assets only by editing the code associated with a prior transaction.

The problem with the attack on Nomad Token Bridge is evident in how it started with one hacker, and many others followed suit. As a matter of fact, it even qualified as the first decentralized crowd looting for a major cryptocurrency bridge. On top of it, the chaotic turn of events in the Nomad Token Bridge also presents proof of how crypto hacks have evolved. The Nomad protocol has repositioned its identity as a ‘security-first cross-chain messaging protocol’ in response to the hack.

Harmony Bridge

The examples in the crypto hacks list would also include the mention of the attack on Harmony Bridge. It resulted in losses worth $100 million and presented another lesson in crypto security. The cause of the hack was the Lazarus Group, which has connections with North Korea.

Apparently, the Lazarus Group took over two of the five security keys of the Binance-Ethereum Bridge. As a result, the malicious agency could approve transactions and siphon assets away from the bridge. In response to the incident, Harmony Bridge needs four of the five validator keys to achieve consensus regarding transactions. On the other hand, it has not come up with any specific plans for compensating the users.

Cashio

The recent additions among renowned cryptocurrency hacks also feature Cashio. It lost around $52 million to a hack in March 2022 with a unique exploit. Hackers used the infinite mint glitch through a collection of fake accounts for depositing collateral without any value for the CASH stablecoin on Cashio. As a result of the hack, the peg for the CASH stablecoin crashed down to zero. The more alarming detail in the case of the Cashio hack refers to the fact that the platform has not been able to recover from it.

Fei Protocol

The Fei protocol hack is also one of the notable cryptocurrency hacks in 2022, which deserve everyone’s attention. The hack took place on April 30, 2022, and resulted in a loss of $80 million worth of assets. Hackers exploited a reentrancy bug within the crypto lending protocol for taking out loans alongside withdrawing the collateral for concerning loans.

Fei users came up with an interesting proposal as their response to the hack. The proposal focused on empowering investors by enabling repayment for the bad loan by hackers. Subsequently, the FEI stablecoin has been able to maintain its dollar peg after recovering from the hack.

Wintermute

The final addition among the recent crypto hacks would point at Wintermute, the popular cryptocurrency market maker. The DeFi platform encountered losses of almost $162 million in the recent hack in September 2022. With over $200 million owed to other participants in the DeFi market, Wintermute has a lot to deal with. After the hack, Wintermute announced a 10% bounty to the hacker for returning the funds.

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