Since the introduction of Bitcoin in 2009, the cryptocurrency industry has rapidly gained immense popularity. However, the industry has also faced a vast variety of challenges. The blockchain’s unique characteristics, such as its anonymity and elusiveness have attracted the attention of cybercriminals.
The year 2018 is turning out to be one of the worst years of cryptocurrency losses since the introduction of blockchain technology. This is due to the vast number of security vulnerabilities the plague cryptocurrency exchanges. This has accounted for at least $700 million cryptocurrencies being stolen from exchanges in 2018 so far. In this article, you’ll find the details of high profile cryptocurrency hacks that have occurred this year.
In January 2018, the Japanese exchange Coincheck suffered an attack which saw about $400 million worth of NEM tokens were stolen. NEM foundation president described the attack as “the biggest theft in the history of the world.” NEM is a cryptocurrency that is similar to Bitcoin but also contains other varied features.
Over 500 million NEM tokens went missing after the attack. The Japanese cryptocurrency exchange did not disclose how the attack occurred, instead, clarifying that the incident was not an inside job.
Later, Coincheck discovered 11 cryptocurrency wallet addresses where all the stolen cryptocurrencies where stored. These accounts were labelled as “coincheck_stolen_funds_do_not_accept_trades : owner_of_this_account_is_hacker.”
The cryptocurrency exchange BitGrail was hacked in February and around 17 million Nano (XRB), valued at a little over $170 million, was stolen by hackers. BitGrail was trading Nano, a cryptocurrency previously known as RaiBlocks.
While the exact cause of the hack is unknown, BitGrail froze all related accounts linked to the illicit money transfer.
In March, Francesco Firano, the founder of BitGrail announced that it would reimburse the stolen Nano to its investors. The firm said that it would initially refund 20 percent of their losses and promised to return remaining 80 percent of the stolen funds sometime in the future.
Around $50 million was lost by an international group of investors after, putting their money into a bitcoin investment group called the BTC Global. The incident occurred last March, and some victims reportedly lost as much as $117,000.
More than 27,500 people filed complaints against the company to South Africa’s Directorate for Priority Crime Investigation, with many lodged from outside South Africa including America, Australia, and others.
Complicating the situation, individuals in control of the official BTC Global website, posted a statement claiming that the group's funds manager, Steven Twain, had disappeared on February 18. The official statement released by BTC Global said, “Until Steven Twain resurfaces or is found there is nothing the admin team can do.”
Earlier this January, an unidentified hacker stole more than $400,000 in Stellar lumens after hacking the digital wallet BlackWallet, The attacker hijacked BlackWallet’s domain name system (DNS) server, by implanting a malicious code that transferred all deposits of 20 or more lumens into another wallet controlled by him/her.
The stolen funds were transferred to a Bittrex wallet. Unfortunately, however, the identity of the hacker remains unknown.
The decentralized home sharing network Bee Token’s initial coin offering (ICO) was hit by a phishing scam. Nearly $1 million was stolen in just a day. The attack occurred in February.
Investigators found discovered three Ethereum addresses, two of which had been confirmed to be part of the Bee Token scam. One of the accounts was only part of the scam and showed a balance ranging between $100,000 to nearly $600,000. The earliest transaction from the account also matched the ICO date.
CoinRail, a popular South Korean cryptocurrency exchange was hit by hackers and lost around 30 percent of its cryptocurrency assets. According to reports, a hacker stole 2.6 billion NPXS, 1,927 Ether, 93 million worth ATX and 831 million DENT coins. The overall assets were worth around $40 million.
The hackers’ account was identified on Ethereum blockchain as Fake_Phishing1432.
This list compromises only a fraction of all the losses related to cryptocurrency hacks and scams that occurred this year. Unfortunately, most of the scam and frauds occurring at a smaller scale often go unreported. Given the popularity of cryptocurrencies and estimates of its growth in the near future, blockchain developers and exchanges must work together to make the platform more secure for customers. Vulnerabilities must be proactively hunted and addressed to ensure that the propagation of such attacks are stemmed before they cause widespread havoc.