As the cryptocurrency market has boomed over the last 10 years, so too have the number of security breaches and cyberattacks trying to take advantage of its growth.
According to a new report from invezz, it’s estimated $12.1bn in cryptocurrency was stolen between January 2011 and December 2021 with Japan, South Korea, the US, the UK and China being the countries with the most security breaches.
When it comes to how such a massive amount of money was stolen, exploiting vulnerabilities in crypto exchange security systems was the most common tactic with $3.18bn lost in security breaches, $1.76bn stolen through Decentralized Finance (DeFi) hacks and $7.12bn lost through crypto scams.
At the same time, crypto scams increased by 850 percent from 2011 to 2021 and this year saw the highest number of scams with 76 in total. However, the largest increase in the number of scams occurred between 2016 to 2017 (180%) when some of the most serious cyberattacks took place.
Biggest cryptocurrency security breaches
The hack of the Japanese crypto exchange Mt. Gox back in 2014 remains the biggest in history after all these years. However, it marked the second time the exchange was hacked as it fell victim to a similar attack back in 2011 when $8.75m worth of Bitcoin was lost. In 2014, Mt. Gox lost the almost 850k bitcoins (equivalent to $615m) after hackers flooded the exchange with a huge amount of fake Bitcoin.
The second biggest cryptocurrency security breach occurred in August of this year when the blockchain-based platform Poly Network had more than $600m in cryptocurrency stolen from it. Thankfully though, most of these funds were returned and the platform offered the white hat hacker responsible a job.
Back in January of 2018, hackers infiltrated the exchange Coincheck and stole $534m in cryptocurrency. They did this by accessing hot wallets in a phishing attack before spreading malware to extract the funds. While Coincheck suffered the third largest cryptocurrency security breach in the last ten years, the exchange is still up and running and was even acquired by the Japanese financial services provider Monex Group in April of 2021.
Invezz cryptocurrency analyst, Milko Trajcevski explained why keeping your coins in a cryptocurrency wallet like the Ledger Nano X is the best way to protect them, saying:
“The main thing here that we all need to be aware of as cryptocurrency investors is the fact that, as long as you keep your cryptocurrency tokens on the exchange wallet you are using directly, they will be at risk. Hackers and bad actors are constantly pushing towards new ways of compromising the security of these exchanges, and while they are fairly secure and even promise cold storage options and insurance, you still have a slight level of risk there. The best and only way for you to keep your cryptocurrency tokens as safe as possible is to store them within a private cryptocurrency wallet. A private cryptocurrency wallet is one where you have full control over the private keys to that wallet. Additionally, you can go the extra distance and invest in a private cryptocurrency wallet, but the general idea here is to keep your tokens off an exchange, where you have full ownership and control over them.”
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