The Largest Cryptocurrency Hacks So Far

Investing News

One of the obstacles to mainstream adoption of digital currency has been hacking. Some high-profile thefts have occurred on various cryptocurrency exchanges and platforms, deterring investors from putting their money on them. 

Blockchain projects are expected to be secure, but two hacks in August and September 2022 made the top seven of all time, shattering this myth. So far, over $1.6 billion worth of cryptocurrency has been stolen from users in 2022, according to blockchain data platform Chainalysis. Take a look at the largest crypto hack to date.

Ronin Network: $625 Million

The largest cryptocurrency hack to date was conducted in March 2022 and targeted the network that supports the popular Axie Infinity blockchain gaming platform. Hackers breached the Ronin Network and made off with around $625 million worth of Ethereum and the USDC stablecoin. The U.S. officials said that a North Korean state-backed hacking collective, Lazarus Group, was linked to the theft. Binance was able to recover $5.8 million of the stolen funds a month later, but it would still be the largest hack in history.

Poly Network: $611 Million

In August 2021, a lone hacker pounced on a vulnerability in the Poly Network decentralized finance platform and made off with over $600 million. The project’s developers issued an appeal on Twitter for the stolen funds, which included $33 million Tether. The Poly Network then established several addresses for the funds to be returned and the unknown hacker began to cooperate. After only two days, around $300 million had been recovered and it emerged that the hacker had targeted the network “for fun” or as a challenge.

Coincheck: $534 Million

In January 2018, the Japanese exchange Coincheck suffered an attack to the tune of $523 million NEM coins valued at about $534 million. The vulnerability was created by a hot wallet, which is a live cryptocurrency wallet and not as safe as an offline cold storage wallet. At the time, the Coincheck hack was larger even than the notorious Mt. Gox hack; NEM Foundation president Lon Wong described it as “the biggest theft in the history of the world.” Coincheck was able to survive the hack and continued to operate, despite being bought out a few months later by the Japanese financial services company, Monex Group.

Wormhole: $325 Million

The decentralized finance platform Wormhole was targeted in February 2022, with $325 million taken by hackers. The attack had been made possible by an upgrade to the project’s GitHub repository, which was not then deployed to the live project. The popular cryptocurrency bridge had to plug the
hole in the project’s finances after the funds were not recovered. This was also the largest theft that included Solana, one of the rivals to Ethereum’s dominance in the worlds of DeFi and NFTs. Up to $47 million was taken in the blockchain’s native SOL token.

Nomad Bridge: $190 Million

Only one month before the Wintermute breach was a more significant hack of Nomad Bridge, which drained $190 million of the project’s funds. Nomad is a cryptocurrency bridge that lets users swap tokens between blockchains, but those have become the latest target for hackers. That is due to the considerable value of assets they hold and the complexity of the smart contract code on which they run.

Wintermute: $162 Million

The most recent hack was that of the leading cryptocurrency market maker, Wintermute, in September 2022. The project lost around $160 million in a hack, with the firm’s CEO offering up a 10% bounty for the hacker if they returned the stolen funds. A crypto market maker provides liquidity
on crypto exchanges to reduce price volatility. The Wintermute situation was made worse by the fact that they owed $200 million in loans to other market participants.

Investing in cryptocurrencies and Initial Coin Offerings (“ICOs”) is highly risky and speculative, and this article is not a recommendation by Investopedia or the writer to invest in cryptocurrencies or ICOs. Since each individual’s situation is unique, a qualified professional should always be consulted before making any financial decisions. Investopedia makes no representations or warranties as to the accuracy or timeliness of the information contained herein. As of the date this article was written, the author owns bitcoin and ripple.

Articles You May Like

4 Quantum Computing Stocks to Buy as Growth Stocks BOOM
Is Alibaba Crazy for Buying into Groupon?
BTC098: Proof of Stake (PoS) Versus Proof of Work (PoW) w/ Jason Lowery
7 Bullseye Stock Picks for Your 2023 Must-Buy List
7 Boom-Bust Stocks to Sell Before They Become Worthless