The previous 12 years have seen considerable financial losses for bitcoin exchanges as a result of security flaws. This begs the question of why cybercriminals continue to target them. If you follow the news, you may have noticed a steady stream of stories concerning hacks in the cryptocurrency industry. If you take security measures into account and educate yourself, you stay on the safe side while using crypto. Click learn more and start with investment education from top experts.
A Decade of Crypto Breaches: Billions Illicitly Taken
Numerous significant bitcoin breaches have garnered media attention during the past ten years. The Mt. Gox exchange had its initial breach in 2011, which resulted in the theft of 25,000 bitcoins, and a second attack in 2012, which resulted in the loss of 750,000 bitcoins. 523 million NEM coins were lost by Coincheck in 2018. In 2021, a strange attack on the decentralized Poly Network resulted in the theft of almost $600 million in cryptocurrency, most of which the attacker gave back.
In the same year, Bitmart suffered a $200 million loss. Many successful attacks occurred in the following year, 2022: Wormhole lost $325 million in February, the Ronin Network lost $625 million, according to rumors, to the North Korean Lazarus Group, Wintermute lost $160 million in September, Binance lost $570 million in October, and FTX suffered a breach that cost it $600 million in November.
What are the Reasons Behind Cryptocurrencies Being Targeted by Cybercriminals?
But why do these instances keep happening repeatedly? Why do these attacks still happen? Why do cybercriminals choose cryptocurrency companies as their top targets? Is their vulnerability the primary cause, or is the situation more complicated? Multiple factors combine to form the truth. Let’s look at the top five elements that attract thieves to crypto companies.
Crypto is Pseudo-Anonymous
Cryptocurrency is not completely anonymous, but it is harder to track than traditional money, which attracts thieves. Furthermore, anonymous cryptocurrency transactions are possible. For example, if a hacker steals Bitcoin, they might use a “Bitcoin mixer” to cover their tracks. A Bitcoin mixer is a service that, in return for payment, conceals transactions.
Vulnerability of Hot Wallets
The two types of wallets that cryptocurrency businesses employ to protect the money of their customers are hot wallets and cold wallets. While cold wallets are physical devices cut off from the internet, hot wallets are like online digital vaults. Due to the fact that no exchange can keep all of its cryptocurrency offline, hot wallets are more susceptible to hacks.
The Realm of Crypto Tech is Still in its Early Days
The first cryptocurrency, Bitcoin, appeared in 2009. Since then, hundreds more have appeared, although the sector as a whole is still relatively new. The market is unregulated, unsteady, and full of deception, giving it a haven for scammers and other online criminals of all stripes.
Valuable Assets are Under the Care of Crypto Firms
The huge worth of the assets that crypto-related organizations deal in is a very evident reason why thieves choose to concentrate on them. Think about popular cryptocurrency exchanges: Binance, for instance, processes billions in trades every day. Imagine if a hacker found a weakness in the exchange’s systems; they might quickly steal millions.
Defi is an Easy Target
DeFi protocols, which facilitate lending and transactions between individuals, have been identified by cyber criminals as a weak point. Nothing prohibits a hacker from looking them over for vulnerabilities as they are built using open-source code. The exploitation of DeFi’s flaws has resulted in numerous crypto attacks.
Wrapped Up
While some consider cryptocurrency to be a fraud or a bubble, others see it as a method to increase financial accessibility. Whatever your position, it’s critical to comprehend crypto criminality to keep yourself safe online.
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