A total of over 980,000 Bitcoins (BTC) have become properties of hackers which when converted to fiat currency, at the current rates of today, amounts to over $15 billion. It is noteworthy that the exchanges handling cryptocurrency have zero insurance policy which makes it risky to leave your money in their care.
Below, we shall look at some of the most shocking hacks that occurred in the world of cryptocurrency.
October 2013, Silk Road
Lost 171,955 BTC, $270,000,000
Silk Road is not particularly an exchange platform but rather a place to make purchases with cryptocurrency. People made use of Silk Road to keep their money. The FBI was in search of its owner, and when they finally caught up with the owner of the exchange, they seized all the digital assets stored in the exchange.
March 2014, MtGox
Lost 850,000 BTC, $700,000,000
One of the shocking hack events in the history of cryptocurrencies happened right after its inception. At that time, MtGox, the most used exchange, was made bankrupt through a series of hacks. The private keys that were supposed to safeguard their wallet, thereby keeping the deposits of customers safe, were left unprotected by the employees of MtGox and this left them open to the attacks meted out to them by hackers. On a regular basis, the hackers kept transferring the wallet content of the exchange to their pockets. Everyone who kept their money with MtGox lost them all. Currently, the amount stolen is worth over $6 billion.
August 2016, Bitfinex
Lost 120,000 BTC, $72,000,000
Bitfinex is popular for various reasons which include the design and unveiling of Tether and also for having the same set of executives with EOS, the biggest functional ICO project. With their successful growth and advancement, Bitfinex still succumbed to hackers. The firm promoted its service as possessing multi-signature wallets for every of their client, but unfortunately, their advertised multi-signature technology was of no use against hackers which led to the loss of 120,000 bitcoins belonging to their customers. Bitfinex didn’t let the malicious attack put them out of business. The exchange platform came up with an idea to create BFX tokens which will be used to compensate their customers that were affected during the hack and promised to repurchase the BFX tokens sometime in the future.
January 2018, Coincheck
Lost 523,000,000 NEM, $534,800,000
Coincheck, an exchange service, adopted cold wallets for their Bitcoin transactions but forgot to give adequate attention to security for NEM, a promising Asian cryptocurrency. They kept all deposits associated with NEM in a single wallet, and that was a costly error. No one can categorically explain how the loss occurred, but the aftermath was a devastating experience for their customers.
These happenings remind everyone that the cryptocurrency world is not for the faint-hearted and that proper care must be observed in handling one’s digital assets. No one should leave the handling of their money to another, and a decentralized exchange is the best for storing funds. Bitcoin is profitable, but it requires proper management in order to enjoy its rewards.