Cryptocurrencies are relatively new, having only gained worldwide popularity in the last decade. Much like traditional currencies, they are subject to threats and security issues that can result in significant financial loss. In fact, substantial security breaches have resulted in the loss of billions of dollars, with 2022 alone seeing a record loss of $3.8 billion.

These significant losses have happened through numerous security breaches, and here we will dive into the 10 most significant breaches in the history of cryptocurrency.

1. Ronin Network $625 Million

The Ronin Network is a blockchain for gaming platforms and is best known for its video game and NFT market, Axie Infinity. In March 2022, Ronin fell victim to the largest security breach in cryptocurrency, leading to the loss of over $620 million. It is believed the cyber breach was carried out by the Lazarus Group, based in North Korea.

2. Poly Network $611 Million

In August 2021, Poly Network, a platform that allows its users to trade in one form of cryptocurrency for another, was hacked and had over $600 million stolen. The money was stolen by an unknown hacker who apparently only wanted to see if they could break into the system and take money, as if it were some kind of game. Eventually, all the stolen money was returned when the Poly Network set up addresses where the funds could be returned.

3. Binance $586 Million

Similar to Poly Network, Binance is another platform that allows users to exchange one cryptocurrency for another. In October 2022, Binance faced a fate similar to that of Poly Network. The platform, or more specifically, the BNB Bridge, which transfers crypto from one blockchain to another, was hacked, and millions of dollars were stolen from platform users. Unlike the Poly Network theft, however, the money taken was not returned.

4. Coincheck $534 Million

Another exchange platform, Coincheck was targeted in January 2018 by hackers, who stole over $500 million. At the time of the theft, this was the largest cryptocurrency breach in history. The company paid back its users and has remained in operation despite this substantial financial blow.

5. Mt. Gox $473 Million

Mt. Gox, yet another crypto exchange platform, faced one of the first crypto thefts in history in 2011, resulting in a loss of over $470 million worth of crypto taken. The company declared bankruptcy in 2014, and while it was an early leader in cryptocurrency exchanges, it is no longer in operation.

6. FTX $400 Million

The FTX exchange, much like Mt. Gox, was a well-known name in the crypto industry. In November 2022, however, it suddenly declared bankruptcy the same day many users saw their accounts drained entirely. This hack saw a loss of $400 million. Three people were eventually charged in the theft, but FTX never recovered from the scandal and is no longer operating.

7. Wormhole Network $325 Million

The Wormhole Network is a decentralized finance platform that allows you to spend, borrow, or lend without a go-between platform like a crypto exchange. It was hacked in February 2022, leading to the loss of $325 million. It’s believed that the unknown hacker found a flaw in the organization’s code and was able to leverage it to steal funds. Eventually, Wormhole’s parent company paid for the losses.

8. Euler Finance $197 Million

Euler Finance is another decentralized finance platform that allows users to borrow or lend crypto. In March 2023, the platform was targeted and saw a loss of $197 million. Over several days, the hacker slowly delivered the money back to the platform.

9. BitMart $196 Million

BitMart is a crypto exchange platform, and like others on the list, it fell victim to a major cyber hack. The hack occurred in December 2021 and cost the company $196 million in losses.

10. Nomad $190 Million

Nomad had a security breach in August 2022 that cost the company $190 million. The hack took advantage of a coding vulnerability with a bug that Forbes said “was so simple that it didn’t even require any programming skills to exploit it.” And many copycat hackers took advantage of this shortly after the first breach occurred. Nomad was able to regain $20 million in losses.

How Do Hackers Manage to Steal from These Organizations?

Hackers can break into these systems in ways similar to how they target banks and other financial institutions, with hackers taking advantage of weaknesses in the organizations’ security systems and phishing schemes that target their users. In addition, crypto hacks are also attributed to the lack of government regulations.

Crypto exchanges and bridges are the most commonly targeted platforms because, unlike blockchains, there are more vulnerabilities hackers can take advantage of. But even crypto games like Axie Infinity (mentioned above) or online casinos like Stake.com, a destination for fast payout casinos, can (and have) fall victim to attacks.

Common methods of attacking or hacking cryptosystems include malicious code that exploits errors or weaknesses in a crypto organization’s code and phishing schemes to get personal information and keys or to get individuals to install malware unknowingly.

Protecting Yourself from Crypto Security Breaches

While some of the ways cryptocurrency is targeted are beyond individual control, there are some things you can do to protect your cryptocurrency and reduce your chances of being targeted. These protections include:

• Keeping your cryptocurrency offline through a ‘cold wallet’ (an offline crypto storage method)
• Installing firewalls and anti-virus software
• Using password best practices like regularly updating your password
• Using multi-factor authentication
• Being aware of phishing schemes
• Avoiding the use of crypto-exchanges for long periods at a time

Final Thoughts

Unfortunately, as these ten major security breaches show, crypto theft isn’t unheard of and is, in fact, relatively common. Naturally, this can cause anxiety or worry over investing in and getting involved in the world of cryptocurrencies. However, exercising caution and implementing security best practices at the individual level can help protect you if you choose to dive into this new form of currency.