With an estimated $1.2 billion lost to fraud, thefts, or scams in the first quarter of 2019 with over $365 million of that lost to thieves and hackers alone, according to CipherTrace, the threat against the industry doesn’t show any signs of slowing down. Every year since 2017, the losses have increased in this first quarter time period. If this trajectory stays the course, we could be looking at billions stolen and laundered by the end of the year.
There are no signs of these black marks against the cryptocurrency market slowing down anytime soon, so let’s check out a few of the significant losses so far this year:
One of the most recent hacks occurred on May 7th on the Binance exchange, with the loss of $40 million in cryptocurrency. The funds were said to have been stolen from a hot wallet that was connected to the internet. When Binance noticed the loss, they immediately shut down all withdrawals and trades, and let their users know immediately of the breach. They resumed business on May 16th.
Shortly following this theft, a scam surfaced, offering to trade the stolen and discounted BTC for ETH online. This prompted a few big names in the crypto community to step forward and offer to help track the stolen BTC. Numerous people have come out to warn users that this is a scam, but it’s unknown how many people fell victim to it.
DragonEX lost an estimated $7 million (earlier reports have the losses significantly lower at around $1 million) this year following a security breach. As they don’t hold their users responsible for losses, they have taken full responsibility. They have managed to retrieve some of the funds and have publicly identified the hot wallets believed to hold the stolen currency.
New Zealand based exchange, Cryptopia announced the first known hacking of 2019 on January 14th, when the exchange went down, claiming unscheduled maintenance. Shortly following, they sent out a message to their users, alerting them to the breach and letting them know that they were working closely with police and high-tech crimes officers to search for the culprits. While a firm number for their losses had yet to be released, it’s believed that over 9% of their holdings were lost. Some speculate that the number totals around $16 million.
On March 29th, Bithumb had its third hack in two years. It’s estimated that over $20 million was taken from the exchanged hot wallets, likely containing their EOS and XRP currencies, although no official report on the amount has been brought forward. It has been said that the exchange believes that it may have been an inside job and did alert the authorities. Not much more has been released following this.
On March 26th, CoinBene, an up-and-coming exchange, went under unscheduled maintenance. After what seemed like ages, with rumors circulating and the exchange trying to negate those rumors, it came to light that the exchange was indeed hacked. While CoinBene has again become fully operational, it’s still unclear what really happened and how much was lost. The estimates range from $40 million to over $100 million. This hack was the most difficult to bear so far, as it seems that the exchange went to great lengths to hide the hack from its users, even if only for a few days.
With cryptocurrency becoming more of an asset, it becomes more likely to become a target for hackers. There are some ways that you can help to protect yourself from hackers, like keeping all of your information private, use 2-factor authentication as an added level of security, and have a secure firewall and network to use. While these do help significantly, as long as you have assets connected to the internet, you’re fallible to attack. Know that there is a risk involved in the trade and do what you can to protect yourself. Crypto exchanges are continually updating their security to keep funds and cryptocurrency as safe as possible, so continue to do your part in helping to protect your finances.