The crypto industry has lost more than $6.68 billion due to various hacks and exploits as of July 2022. This amount continues to rise as we speak. Despite so many advancements, crypto exchanges and stakeholders struggle to secure their funds against hacks and exploits. The value of hacked digital assets in 2021 alone amounted to $3.2 billion. Even high-security protocols like Solana and BNB chain are not untouched from exploits. The increasing cases of crypto hacks have got exchanges, and stakeholders worried. Consequently, demands for enhanced security in the industry continue to grow stronger.
Exchanges Fail To Stop Crypto Hacks In 2022
As of August 2022, hackers and scammers have siphoned off nearly $2 billion in crypto assets through various hacks. According to a Chainalysis report, hackers from North Korea stole nearly $1 billion in crypto assets in 2022. Crypto hacks continue to accompany the exploding popularity of DeFi protocols. From multi-sig to decentralized wallets, investors are resorting to different strategies to safeguard their funds. But, the industry is in dire need of concrete steps to put a curb on rising hacks and exploits.
Biggest Crypto Hacks To Happen So Far
- Ronin Network Hack: The hack involved Axie Network, one of the biggest blockchain gaming universes. More than $620 million were lost in the hack, where the attacker “used hacked private keys in order to forge fake withdrawals” from the Ronin bridge across two transactions. Notably, Ronin has nine validators requiring five signatures for withdrawals. However, the attacker found a backdoor through Axie’s gas-free RPC node.
- Poly Network Hack: Poly Network Hack is one of the most talked about crypto hacks from 2021. The attack involving Cross-chain DeFi platform Poly Network left the platform bereft of over $610 million. Surprisingly, the hacker, Mr. White Hat, the majority of the stolen amount in USDT, except $33 million. It was revealed that the DeFi platform had to literally beg the hacker to return the stolen amount. He was also offered a job at the company and gifted $500,000.
- Coincheck Hack: The hack involving the Japan-based crypto exchange dates back to January 2018. Hackers managed to breach the security of Coincheck, siphoning off over $500 million worth of NEM tokens. The exchange had stored the tokens in a hot wallet, making the task easier for hackers. Later, 18 people were arrested in connection with the hack.
- Mt Gox Hack: Mt Gox was another Japan-based crypto exchange to fall victim to hacking. To understand the magnitude of the breach, Mt Gox was managing 70% of all bitcoin transactions by 2014. Moreover, it was the biggest hack involving Bitcoin, making it one of the most concerning crypto hacks for stakeholders. Shockingly, the hack continued between 2011 and 2014, putting the exchange under the scanner itself.
- Wormhole Hack: One of the most infamous crypto hacks from 2022, the Wormhole hack left the decentralized finance (DeFi) platform bereft of nearly $325 million. The attacker exploited a security flaw resulting from a GitHub repository update of the project. The Wormhole team offered a $10 million bounty to the hacker for returning the funds.
Critical Phase For The Industry
At a time when government organizations and financial institutions are considering the adoption of DeFi and cryptocurrencies, rising cases of crypto hacks might act as a repelling force. Moreover, frequent breaches also act against the authority of crypto exchanges, affecting the trust of retail investors in the industry. Therefore, all the stakeholders must devise a strategy to prevent these hacks. The time to act is now.