Five Largest Bitcoin Hack in Dollars So Far
List of 5 Largest Bitcoin Hack in Dollars
Mt Gox
Mt Gox was the world’s largest bitcoin exchange of its time before it was hacked in 2014. The Exchange used to handle more than 70% of all bitcoin transactions on a worldwide basis. After the hack in which the company lost over 750,000 BTC, it was announced bankrupt. The users of the Exchange never got their Bitcoins back or even a refund for their loss.
All of this started when Mt Gox stopped the withdrawal of Bitcoins on 7 February 2017 stating that the company is working on something. And then after a few weeks on 24 February, the company went offline and shut down its trading. That very week, it was announced that the Exchange had been hacked of 844,408 BTCs among which only 100,000 BTCs belonged to the company, and the rest were of its customers.
Bitfinex
After Mt Gox Hack, comes the Hong Kong-based Bitcoin exchange Bitfinex that got hacked of more than 120,000 BTC in August 2016. It is considered that more than $70 million worth of bitcoin was stolen from the world’s one of the largest exchanges. Although the number of bitcoin stolen from the Exchange is hardly 18% of what was hacked from Mt Gox, it still came as a concern for the crypto industry.
The withdrawals and trading of cryptocurrencies were stopped immediately after the hack, announced Bitfinex. Even the customer’s whose accounts were not hacked lost almost 36% of their account balance. Unlike Mt Gox, Bitfinex issued the victims of the breach with BFX token in order to provide them with a refund of their losses. Luckily BFX was redeemable in USD, and most of the investors got their money back with time.
Bitfloor
On the third number is listed the fourth largest crypto exchange, Bitfloor. Although the number of Bitcoins hacked is not too much as compared to Mt Gox and Bitfinex, the breach has led the Exchange to stop its services. According to the founder of Bitfloor, Roman Shtylman, the Bitcoin hackers were able to gain access to the backup of private keys which was unencrypted and used them to steal a vast majority of Bitfloor’s holdings. At the time, the crypto exchange was left with only two options; one was to continue despite the loss in the hope of gaining back the lost money, another to shut down the Exchange and refund the customers with their losses.
Bitfloor shut down its services and provided the victims of the breach with a refund.
Bitstamp
After Mt Gox hack and bankruptcy in 2014, Bitstamp became the second-largest Bitcoin exchange worldwide. Unluckily, Bitstamp wasn’t safe enough either and one of its hot wallets was hacked for 19,000 BTC. At the time, the stolen bitcoins were worth $5 million, which made it one of the largest Bitcoin hacks of history. The customers using the Bitstamp wallet were immediately informed not to withdraw or deposit any bitcoins due to the breach.
Bitstamp further announced that the hack affected only a fraction of Bitstamp’s holding and that the majority of bitcoin’s are safe in cold storage. Customer’s holdings were not influenced in any way, and the Exchange continued its services with more security features.
Binance
Another large scale security breach occurred last year in 2019 when the world’s largest crypto exchange, Binance was hacked of 7,000 BTC. According to the Exchange,the Bitcoin hackers stole a large number of customer’s security info including their API key, 2FA codes etc. using a variety of techniques like phishing and other attacks.
The Exchange further informed that the affected bitcoin represents only 2% of the total holdings stored in Binance’s bitcoin hot wallet, hence the majority of bitcoins are safe. No customers were affected because of the breach as the company used its SAFU (Secure Asset Fund for Users) to compensate for the loss.
What do we learn from this?
So, these were the five largest Bitcoin hack in Dollars that occurred in the last decade. The list is not limited to these exchanges, and there were many more companies which suffered from such losses due to security breaches. One of the major concerns highlighted from the history of Bitcoin hacks is the security of hot wallets. Hot wallets are easy to crack and gain access to, which is why it is the primary target of the Bitcoin hackers. This is why investors are recommended not to store a large number of bitcoins in exchanges or hot wallets and instead use cold storage wallets, i.e. hardware wallets for security purposes.
While many exchanges learned lessons from the breaches, others have to shut down their services. The primary reason behind all these security breaches is nothing else but the careless handling of private keys and customer’s data. In the early days, people didn’t know much about bitcoin and its security measures which explain these hacks, but as the crypto industry is growing, there are a lot of education materials available online that can help investors prevent themselves from such schemes and frauds. Moreover, people can also use cold storage wallets to store their private keys and manage transactions safely without worrying about losing access to it.
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