Cryptocurrency Exchange Hacks

Like every other investment, cryptocurrency investors are also vulnerable to fraudulent attacks and theft, the most popular being "Hacking". This is the reason why most experts advise potential investors to ensure that they choose secure exchanges that have adopted various technologies that can prevent hacking.

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Over the years there have been cryptocurrency exchange hacks. This article will try to discuss the various hacks that have occurred since the inception of cryptocurrencies.

Mt. Gox

This is a Japanese Bitcoin exchange and its hack is recorded as the most famous exchange hack in Bitcoin's history. This exchange was not hacked only once but twice.

The first hack occurred in June 2011. The hacker on the 19th of June got access to the auditor's credentials and transferred over 2,600 BTC tokens. These stolen tokens were transferred to a private key on the exchange network which Mt.Gox had no encryption code for. This led to the suspension of the exchange for several days. They were able to regain the trust of users on the network again.

The second hack took place in 2014. This was a time when the exchange was handling almost 70% of all Bitcoin transactions in the world. This time over 750,000 BTC tokens which were equivalent to $350 million was stolen. This hack sank the exchange.

Poloniex

This exchange which was one of the busiest and most popular cryptocurrencies exchange was hacked in March 2014. The hack was as a result of a faulty withdrawal code of the exchange.

After the hack, the exchange stopped operation for some time. A statement was released that 12.3% of each users token will be taken by the exchange. Poloniex as an exchange is still in operation and all users who lost tokens have been repaid by the exchange.

Most unofficial sources have reported recently that Poloniex has been hacked. This means that the exchange is still under the radar of hackers.

Bitfinex

This is the second largest hack that was done in the history of cryptocurrencies. The hack occurred in August 2016. The hack happened because the hackers exploited a vulnerability in the architecture of the exchanges multi-signature. About 120,000 BTC tokens which are equivalent to $72 million was lost from this hack.

After the hack, victims were offered BFX tokens that were redeemable in US Dollars. Although, it took time all investors were refunded their money.

Bitstamp

This exchange was set up in 2011 as an alternative to Mt Gox. Being an alternative, it was not safe enough, in 2015 it was hacked.

The hack occurred in January 2015. It was announced by the team of developers' that an unknown hacker got access to the system and stole about 19,000 BTC tokens which were equivalent to $5 million. After, the hack, operations were suspended on this exchange.

It has recovered from this hack as it continues to operate. It has tried to gain back the trust of its users. To strengthen its security, it has adopted the BitGo multiple-signature wallet. This wallet is used for operational reasons.

There are other minor hacks that have occurred over the years, those mentioned above are the most famous and largest that has been recorded.