When are all these cryptocurrency hacks and interferences going to stop?
Hacks Are Not Going Away Anytime Soon
It’s a question that’s probably on every enthusiast’s mind. How can crypto gain mainstream or legitimate status if malicious actors continue to dominate the space? It’s not fair, it’s not right, and thus far, it’s not stoppable.
This is the bottom line that has every trader worried. Crypto hacks, for the most part, appear unbeatable to one extent or another. Despite the advancements made in security over the years, more changes occur in the dark web world that allow hackers to somehow bypass these security measures and gain access to funds that aren’t theirs.
In the past, people have “marveled” at the size of some of these hacks. The two largest on record still stand as Mt. Gox and Coincheck, both of which occurred in Japan roughly four years apart from each other. Mt. Gox occurred in February of 2014 and resulted in more than $400 million in BTC funds disappearing overnight. Much of the money has still not been returned, and the situation has led to more questions than answers over the years.
Coincheck – which occurred in January of 2018 – makes the amount lost by Mt. Gox look like small beans. More than half-a-billion dollars in assorted crypto funds vanished when hackers gained control of the exchange’s hot wallet systems, and the event inspired Japanese financial regulators to take over and set the bar for crypto exchanges in the future. Those who didn’t meet that bar were threatened with shutdown.
While nothing of this magnitude has occurred again, 2019 brought us something different. Rather than one or two big hacks, it brought us several small ones, and 2019 played host to more crypto thefts and cyberattacks than any previous year. The growth of security measures hasn’t amounted to much considering more attacks are taking place than ever.
A new report by Chainalysis suggests the following:
The majority of funds stolen in exchange attacks end up being sent to other exchanges, where they’re likely converted into cash, [but] a substantial portion of funds sit unspent, sometimes for years… In those cases, there may still be an opportunity for law enforcement to seize the stolen funds.
The Report Lays It Out
In addition to attacks on exchanges and personal wallets, the cybersecurity firm explained that many bitcoin and crypto attacks have occurred through other means, such as ransomware payments. The document states:
Overall, just over 300,000 individual accounts at Binance and Huobi received bitcoin from criminal sources in 2019. That may come as a surprise given that Binance and Huobi are two of the largest exchanges operating and are subject to KYC [know your customer] regulations.
Clearly, some hackers are smart enough to bypass these regulations and still “do their jobs.”