Forget Banks: Hackers Stole $100+ Million in Six Different Cryptocurrency Exchange Attacks

Hackers enjoyed incredible windfalls by hacking cryptocurrency exchanges in 2021. Six of these cyberattacks netted crooks more than $100 million in each theft. The largest cyberattack on a crypto platform occurred in December when hackers stole at least $200 million from Bitsmart.

NBC News reports that throughout 2021, there have been more than 20 hacks in which thieves stole at least $10 million worth of digital cryptocurrency, in six cases hackers stole more than $100 million. In comparison, traditional bank robbers made an estimated average of less than $5,000 in the same time frame, according to the FBI’s annual crime statistics.

Participant hold their laptops in front of an illuminated wall at the annual Chaos Computer Club (CCC) computer hackers’ congress, called 29C3, on December 28, 2012 in Hamburg, Germany. (Photo by Patrick Lux/Getty Images)

Cryptocurrency experts have begun warning investors that exchanges are lucrative targets for hackers and similar hacks are likely to continue. Esteban Castaño, the CEO and co-founder of TRM Labs, which builds tools for companies to track digital assets, commented: “If you hack a Fortune 500 company today, you might steal some usernames and passwords. If you hack a cryptocurrency exchange, you may have millions of dollars in cryptocurrency.”

Cryptocurrency exchanges are often run by small teams attempting to manage many users. Exchanges regularly keep access to some of their cryptocurrencies in what is called “cold wallets,” which are kept securely offline. But the rest is placed in “hot wallets,” which are liquid and can be sent to users immediately.

This means that if a hacker accesses a particular employee account, they can gain access to sometimes millions worth of cryptocurrency kept in these hot wallets.

Dave Jevans, the founder of CipherTrace, a company that tracks theft and fraud in cryptocurrencies., commented: “If you steal the private keys to a hot wallet, it’s not like stealing a database of people’s names and Social Security Numbers. You’ve just basically stolen all their money.”

If an exchange is large enough, they often plan ahead for such issues and develop an emergency fund to compensate customers if the exchange is hacked, but many do not have the means to do this. “Not every exchange is so wealthy or has so much foresight. It just goes, pop, ‘We’re out of business. Sorry, you’re all screwed,’” Jevans said.

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