Crypto Exchange Hacks: Stories and Security Tips

Cryptocurrencies are becoming more well-known every day. While the older ones are growing in popularity, and increasing their customers, while the new ones are growing in popularity and gaining customers. As customers grow increasing their turnover. However, as with all things when there’s money available, there will be people who would like to get the money.

In the world of cryptocurrency, there is as “Crypto exchange”. It’s an online platform that users can use to swap one cryptocurrency to another. Naturally, transactions of large amounts are made on the biggest of them which is why it’s reasonable to conclude that for certain periods, there have been massive savings on the accounts of a number of thousands (or maybe even millions) of users simultaneously.

The first attacks on these exchanges occurred in the beginning of 2010, however, they failed to reveal all the flaws and mistakes that is the reason major cryptocurrency exchanges, as well as their users, continue to suffer.

The most significant hacks of crypto exchanges

Hacking is among the fields that is growing rapidly in the present. Hackers steal information, cash, DDoS attacks, and many more. Internet hackers and exchanges for crypto are not overcome.

A prime example of a company ones to fail was an exchange for cryptocurrency named Mt. gox. The attack took place in the year 2011. Around 500k bitcoins were stolen in during the year. It was the fault of the audit account of the previous administrator of the exchange Jed McCaleb. Hackers gained access to it and take one-fifth of one million BTC from their accounts.

It’s unfortunate that this wasn’t the final flight for this platform. In 2014, more than 850,000 BTC disappeared from the wallets of users which was around $450 million. After a while, it was discovered that the issue had been. The protocol was found to be infected with a flaw that permits you to alter the ID of a transaction that attackers made use of. In the aftermath, the biggest cryptocurrency exchange in the world closed. Bitcoin’s price decreased by 30 percent over a %.

BitfinexComment

A lesser, but still important crime was an incident of burglary in August of 2016. The total amount of 120,000 BTC was taken off the Bitfinex exchange in the period of the theft, which was the equivalent of US$72 million. The hackers discovered an error in the system for security, specifically in the process of confirming transactions. The flaw required three keys, two for the exchange itself and the third one going to BitGo who took care of security for the entire system. BitGo is dedicated to verifying every transaction that are made on this exchange. After fooling their algorithms hackers were able to get their security systems to allow the withdrawal of funds.

Due to this event caused by this incident, due to this incident, the Bitcoin exchange rate decreased by 18 percent. The good news is that users were given special compensation and have paid back all their money for the time being. Also, Bitfinex remains among the largest and most popular crypto exchanges on the market.

Also Read: Bitfinex Cryptocurrency Exchange: Review and Trading

Bithumb

This exchange has been attacked multiple times, and in the last couple of years, there have been three thefts. A total of $65 million was damaged.

As of 2017, the firm announced that hackers had gained access to the personal data of 31,000 customers. Six years later, it was found out that, in addition to the data loss $7 million of Ethereum (ETH) cryptocurrency Ethereum (ETH) was taken. North Korean hackers were blamed for the theft.

A year later The rig was once more targeted by attackers. It is now only the equivalent of $32million worth of XRP has been taken.

The platform was attacked last in the year 2019. We discovered the attack in a very strange manner. The management said:

The system that monitors transactions identified unusual withdrawals of cryptocurrency that led to the removal of the withdrawal and deposit function. In addition, all cryptocurrency has been transferred into cold wallets.

The exact amount of money stolen was not disclosed, however, according to experts, the figure was experts estimate that 3 million EOS along with 20 million XRP were snatched from accounts of users. This is around twenty million US dollars. The majority of the stolen money was reimbursed to all victims. The exchange later announced a drastic change in their system of wallets, to provide greater security.

Binance

The incident took place in the year of the year of 2019. In the meantime the theft of 7700 BTC was taken from accounts of exchange users in the year that was at the time was approximately forty million US dollars in exchange. Then came dropping an amount of 1 percent and in the weeks following, it rose by 20 %.

This theft happened over a period of time, and hackers employed the same pattern of a phishing attacks. They disguised fake domains with Punycode. It is the process of changing domains into the ASCII string of characters. The accounts’ funds they were able to access were not hacked by hackers, however, they did create API keys that were later used to purchase VIA/BTC.

Following this incident, a myriad of theories and rumors appeared on the internet that in reality, Binance simply laundered money through this manner, since they wanted to spread information and therefore influence market conditions.

Tips

Technology is evolving every day. Security levels are becoming increasingly difficult. Security experts are constantly establishing different levels of protection. However, the same experts work with them, just from opposite sides of barricades.

Before hackers would transfer funds into their accounts, now they are creating brand new API keys, and transfer funds to a different cryptocurrency, and so on. All of this to cover their tracks since over time, they’ve become more adept.

To secure your funds, apply the following strategies:

  • Do not keep all of your money on the exchange, as in the event of hacking, you may be wiped out of everything.
  • Use only large exchanges that have an established reputation. The data of crypto exchanges must be covered by an insurance fund that can pay the customer for damages during the case of hacking.
  • Use two-factor authentication. be attentive to the domain of the website you’re visiting Be sure to monitor your email for suspicious messages.

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