The 5 Biggest Crypto Heists Cost Investors $2 Billion. Here's How to Protect Yours
KEY POINTS
- Cybercriminals have targeted crypto exchanges in the past few years.
- Some cryptocurrency owners were compensated for their losses, but there's no guarantee.
- There are a few steps you can take to protect your digital assets, including using a cold wallet and being especially vigilant about keeping your passwords and other information private.
Cryptocurrency prices are known for being pretty volatile, and the past few years have been no exception. Bitcoin (BTC), for example, surged to a record high of $68,990 in 2021 but has fallen to just over $27,000 as of this writing.
This volatility spurs a lot of interest from investors looking for the potential to benefit when cryptocurrencies are on the rise. And that sometimes attracts people who'd rather just take everyone else's crypto rather than buy their own.
The crypto market's lack of oversight and safeguards has made it especially appealing to thieves looking for a quick buck. And because of the digital nature of cryptocurrency, it can be easier to steal than other assets.
Cryptocurrency heists have been very lucrative for cybercriminals, with over $2 billion taken from cryptocurrency wallets. Here are the five largest ones and a few steps you can take to protect your crypto.
The five biggest crypto heists
Cryptocurrencies have had a storied history for years, including these top five heists based on research from cybersecurity company Kaspersky.
1. The KuCoin crypto exchange ($285 million)
This Singapore-based exchange detected fishy transactions on its platform in 2020 and quickly transferred digital assets into cold storage, but not before the damage was done.
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2. The Wormhole heist ($334 million)
Kaspersky says Wormhole is a tool that mediates cryptocurrency transactions, and in 2022, some thieves exploited a vulnerability in the platform. Wormhole offered the thieves $10 million to return the stolen tokens, which they passed up and instead stole $334 million in crypto.
3. Mt.Gox crypto ($480 million)
This one may hold the record for the longest heist, considering that it began in 2011 and ended three long years later. Hackers got a hold of the keys to a digital wallet on the exchange and began taking Bitcoin out of it for several years, totaling about $480 million.
4. Coincheck ($496 million)
It's a little unclear how they did it, but criminals may have stolen the keys to some digital wallets and transferred about 500 million coins out of the Japan-based exchange. They then began selling the coins at a 15% discount on a website they set up.
5. Ronin Network blockchain platform ($540 million)
Cybercriminals used spyware to take $540 million in crypto from the Ronin Network in 2022. The heist was partially implemented by sending a fake job offer to an employee to plant the malicious software.
Fortunately, much of the cryptocurrencies stolen in these heists were reimbursed or compensated, aside from Mt.Gox, which is still working to pay back investors. However, the ongoing threat to crypto exchanges is still a big issue for crypto investors, which means it's as important as ever to secure your crypto safely.
How to protect your cryptocurrency
The recent meltdown of the crypto exchange FTX has shown the volatility of this market and that investors still need to be cautious about buying, holding, and storing cryptocurrencies.
Here are three simple ways to protect yourself:
- Put your crypto in a secure wallet: The safest version is called a cold wallet, which is essentially a flash drive that you don't connect to the internet. A hot wallet, on the other hand, is software-based and usually works seamlessly within crypto exchanges. Many exchanges offer hot wallets, but while convenient, they are less secure than cold wallets.
- Research the exchange: There are many crypto exchanges out there, but the recent collapse of FTX is a reminder that they're not all reputable. While it's impossible to weed out all potential fraud and scams, it's a good idea to check if a platform has been hacked before and look into what security features it offers. Two good examples of secure exchanges are Gemini Exchange and Coinbase.
- Be vigilant: Be careful about what links you click, how you store your passwords, and what emails you open. Implement any other ways you generally try to protect your personal information online for your cryptocurrency dealings, as well.
As the above heists show, owning cryptocurrency can be risky. And while the U.S. government is delving further into cryptocurrency oversight, your digital coins aren't insured by the government in the same way that money in your bank account is. That means you'll have to do a lot of the work to ensure you've done everything possible to protect your cryptocurrency.
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