At the beginning of last month, May 2019, it was quite devastating to learn about a security hack that resulted in the loss of over $40 million worth of Bitcoins. This was quite a blow to Binance, one of the leading Blockchain exchanges today.
It is now a hot trend, a crime gaining popularity among elite programmers and fintech experts to exploit loopholes in smart contracts and vulnerabilities in Crypto platforms.
Chainalysis cites that hackers have stolen digital currency amounting to $2 billion since 2017.
‘Most of these are never revealed’ claims Mike Orcutt, an associate Blockchain editor at the MIT Technology Review.
Mid-September, last year; Japanese based cryptocurrency exchange ‘Zaif’ got hacked and ended up losing 5,966 Bitcoins. The valuation of which by that time was worth over $65 million.
The company tasked with investigating the Zaif Security breach, Tech Bureau pointed out that a group of hackers’ gained unauthorized access to the exchange’s valuable wallets; and eventually made away with a mix of Bitcoin cash, Bitcoins and monacoin. Until today, neither Zaif nor Tech Bureau has been able to uncover the amount of Bitcoin Cash that was stolen.
Just recently, on March 20, the FBI released a stun warning to cryptocurrency users about the security threats of sim swapping. The San Francisco branch for the Federal Bureau of Investigation claimed that a hacker could easily take control of a user’s device during a sim swap.
The threat became even more apparent after one; Michael Terpin lost assets worth millions of dollars after a simple sim swap. Subsequently, Terpin launched a $224 million lawsuit against AT&T, a mobile cellphone service.
Along with a press release by John Bennet, the special agent in charge of FBI-San Francisco, that stated,
‘The FBI has seen an increase in the use of SIM swapping by criminals to steal digital currency using information found on social media. This includes personally identifying information or details about the victim’s digital currency accounts’
The investigation division maintained that they wanted to make people a harder target, and in the very case of falling victim of a hack, having the possibility to quickly regain control.
The most famous hack of all times remains to be the Mt Gox thievery that witnessed the loss of more than 750,000 BTC. Sadly, the hack proved to be vile enough that the company’s operations came to a halt. This hack happened in 2014 at a time when Mt.Gox was at the helm, the pick of serving more than 70% of the world’s Blockchain transactions.
A prior hack had happened before 2014, and this one was around early 2011. The amount lost in this first one was 2609 Bitcoins. Fortunately enough, the company was able to stagger back into operation and stabilize itself. Until, 2014 when the unheard happened.
The first quarter of 2019 has seen hackers get away with over $356 million from Blockchain platforms and infrastructures. The industry is worried that hackers are developing more sophisticated methods that are complex to track and investigate.
One trick, for instance, is organizing themselves in large cartels spread out across the world. At this point, the move funds through thousands of wallets, creating about 5,000 transactions and finally cashing out. These tricks are usually implemented after the hacking has been completed and the criminals want to hide the reserve’s origin.
A report by chainalysis was able to identify the trends of some of the crypto hacks and establish their traits. For example, the report claims that the hackers may take a hiatus from withdrawing the funds for up to 40 days, after when they cash out the stolen amounts. The hiatus is meant to buy time until the public loses interest in the case.