Theclaimers Logo

Your Crypto Exchange Has Been Hacked - How can this Happen?

Cryptocurrency is a decentralized digital forex that makes use of cryptography for invulnerable transactions and the possession of information.

A digital ledger known as a blockchain is used to record cryptocurrency transactions. The standards of blockchain science make it impossible to hack into a blockchain. There are faults outside the blockchain that give thieves advantages. Hackers can obtain the right of entry to cryptocurrency owners’ wallets and alternate debts to steal crypto.

In the past year, hackers have stolen billions of dollars worth of digital assets by breaching some of the cryptocurrency exchanges that arose amid the bitcoin bubble.

In more than 20 thefts this year, a cyber thief stole digital currencies worth at least $2 billion from a cryptocurrency exchange or project. According to statistics obtained by NBC News, hackers stole more than $100 million in at least six incidents. By comparison, bank robberies netted criminals an average of less than $5,000 for each heist last year, according to the FBI’s annual crime data.

Pump And Dump Works

In 2021, we witnessed a 50% year-over-year increase in crypto-related scams to over 500,000. And looking ahead we anticipate a more than 75% increase in 2021!

If you are someone who’s interested in Cryptocurrency, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!

Table of Contents

Why do Bitcoins Get Stolen?

Bitcoin is viewed as hack-proof because the blockchain is continuously reviewed through the complete network. Thus, assaults on the blockchain itself are very unlikely.

Most security flaws in the cryptocurrency industry result from people and websites not adopting the appropriate security precautions.

 The majority of the time, holding cryptocurrency in insecure locations leads to the stolen money. A “hot wallet,” for instance, is any cryptocurrency wallet that is online or otherwise connected to the internet. Hot wallets are either wallets hosted on exchanges without cutting-edge security safeguards in place or wallets hosted on PCs, mobile devices, or both. Private wallet keys that are carelessly kept on a vulnerable, hackable device are sometimes called “hot wallets.” Stolen cash generally results from storing cryptocurrencies in genuinely no longer secure locations.

Cryptocurrency wallet

How Is a Crypto / Blockchain Secured?

Different blockchain networks could have different restrictions on who can participate and who can view the data. It is common practice to categorize networks as public, private, permission, or permissionless, based on who is allowed to join the network and how users may access the network.

Public blockchain networks often allow anybody to join, and users may maintain their anonymity while doing so. A public blockchain relies on computers that are linked to the internet in order to validate transactions and arrive at a consensus. Bitcoin is likely the most well-known public blockchain, and the process through which it gets consensus is known as “bitcoin mining.” Computers on the Bitcoin network, which are collectively referred to as “miners,” compete against one another in an effort to solve a difficult cryptographic problem. This allows the transaction to be validated and generates proof of work. In this form of network, the only restriction on identity and access is the use of public keys; there aren’t very many of them.

In most cases, only well-established businesses are permitted to join private blockchains, and the use of identity is required in order to authenticate membership and access credentials. The collaboration of the groups results in the formation of a “business network” that is accessible only to members. A private blockchain on a permission network would reach a consensus via the use of selective endorsement, in which known users will attest to the legitimacy of the transactions. Only members who have been granted the appropriate rights and access levels are able to update the transaction ledger. For this sort of network, there have to be more identification and access restrictions put in place.

When designing a blockchain application, it is essential to establish which form of the network will be most beneficial to the aims of your firm. Private and permission networks have the potential to be rigorously controlled and are thus chosen for reasons of compliance and regulation. On the other hand, public and permissionless networks could be able to accomplish greater dispersion and decentralization.

crypto searching

Which Cryptocurrency Has Been Hacked So Far?

Since the inception of the internet, there have been ongoing challenges to cyber security that use advanced techniques every day. Criminals and organized hackers attack cryptocurrency exchanges in an effort to steal large sums of money in the form of Bitcoin, Ethereum, and other cryptocurrencies. 

Numerous cryptocurrency platforms have gone down as a result of massive cyberattacks that have affected at least 47 bitcoin exchanges since 2012. Hackers breached a record 19 crypto exchanges in 2019 alone; however, the number has been declining recently.

Cryptocurrencies have defied hacking efforts on their own. However, there have been a number of 51% attacks against cryptocurrencies like Ethereum Classic, Bitcoin Gold, and Bitcoin Satoshi Vision (BSV) (ETC).

The first crypto alternate to be hacked in 2022, Crypto.com is one of the world’s most famous crypto apps and regular exchanges. On January 17, around 483 client bills had been compromised in accordance with reports. KuCoin, one of the most famous exchanges for buying and selling bitcoins, was hacked on September 25, 2020.

The UK-based crypto platform Cashaa stopped all crypto-related transactions on July 11, 2020, after a hacker used to be in a position to withdraw 336 Bitcoins. The small Italian cryptocurrency platform Altsbit was hacked on February 5, 2020.

DO YOU SUSPECT THAT SOMEONE HAD SCAMMED YOU?

If you have suspicions of a scam or phishing attack, you can rely on experts to help you with protection, mitigation, and fund recovery. You will feel safe knowing that experts with years of experience will be guiding you!

man-thinking-of-scam-protection.png

Can Someone Steal My Cryptocurrency?

The straightforward answer is yes, your cryptocurrency can be stolen. In the year 2022, hackers have already stolen bitcoins worth close to two billion dollars. According to the findings of the investigation, cybercriminals stole $1.2 billion during this same period one year ago. When compared to the previous year, this represents a growth of nearly sixty percent.

Early Bitcoin Exchange Hacks

Although the concept of Bitcoins is relatively new, the first serious Bitcoin exchange hack occurred in 2011 when the cryptocurrency exchange Mt. Gox lost 25,000 bitcoins, which at the time were worth around $400,000. 

During that time period, the cryptocurrency exchange was responsible for processing almost 70 percent of all bitcoin transactions. The attack continued, and in 2014, Mt. Gox was attacked for the second time in its history. It is estimated that around 650,000 of its customers’ bitcoins and approximately 100,000 of the company’s own bitcoins were lost. This accounted for around 7% of all bitcoins at the time and had a value of approximately $473 million at the time. 

The first hypotheses put out to explain the disappearance of the money were vague, but more evidence suggested that the coins had been stolen from the digital wallet of the company.

file storage

Top Key Points to Protect Your Cryptocurrency

You can take several handy steps to keep your cryptocurrency from being stolen. Wallets are custodial, non-custodial, hot, and cold.  There are some top key points to staying protected:

  • Never keep your keys in the wallet on your smartphone or any other internet-connected device.
  • Your personal keys have to be held in cold storage continually.
  • If you are no longer inclined to take risks, do not let anybody else keep your keys.
  • If you wish to use your cryptocurrency, only add the necessary keys to your hot wallet, carry out your transaction, and then quickly remove them.

Key Takeaways!

Any hot wallet, or one that is connected to another device or the internet, is the least secure type of wallet. 

Never keep your keys on a device that has a connection that is always on or accessible for security reasons. It can be hacked if it has a connection and a program is used to obtain your keys.

do you need help?

A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.

Please fill up the form. Rest assured that our support team will get in touch with you

Share this article
Facebook
Twitter
LinkedIn
Leave a comment

Related Posts

visa card

Common Visa Card Scams That You Need to Know

Although Visa card scams can take many different forms, their primary purpose is to trick you into disclosing your personal information and credit card information. After that, the con artist could try to use your Visa card without your knowledge, try to sell the information, or just take the money and go.

Read More »
match app in phone

Watch Out for Scammers on Match.Com

If you’ve ever met anyone online, you may find the following information interesting: a solid one-tenth of – that’s a staggering one out of every ten – online dating profiles on major dating websites are fraudulent. Keep reading to know all.

Read More »
Legit or Scam

The League Dating App Legit Or Scam?

The League is a popular dating app that has been around since 2015. It was created by CEO Amanda Bradford to provide an exclusive, unique experience for the users. The app is geared towards young professionals and those looking for meaningful, long-term relationships.

Read More »
Scan the code