Biggest Bitcoin and Cryptocurrency Thefts in History
Bitcoin has security as one of the greatest features. Among the fundamental aspects of the currency is to protect users ‘ privacy, prevent theft of assets and avoid f harmful practices, such as double spending. The fact that Bitcoin applies important security measures does not mean that it is untouchable.
Largest theft of cryptocurrency that went down in history
Over the decades, banks have expanded and improved security mechanisms to prevent robberies, and even so, they continue to occur. Bitcoin is not many years old, and there is still a lot of work to do to make the system more secure.
There are many methods by which a third party can obtain our funds. The most common Ponzi pyramids and fraudulent sites that request our private key. While these actions are important and deserve to be monitored, attacks on exchanges that steal users ‘ money and exploit wallet security breaches are even more serious.
Let’s take a look at some of the biggest thefts of Bitcoin as well as other cryptocurrencies, because all cryptocurrencies on the market have value and all can be stolen.
The Biggest Bitcoin Thefts in History
- Gox (from 640,000 BTC to 850,000 BTC)
The exchange, which was based in Shibuya, Tokyo, Japan, began operations on July 18, 2010. The problems began in late 2013, when the exchange reported insolvency and ended its existence on February 25, 2015, disappearing along the way between 640,000 BTC and 850,000 BTC. This is still being talked about and written about in many media outlets, as the case was really extraordinary. The story can be divided into two parts:
- Gox Robo (25000 BTC)
In the first place, we put 2011, when an unidentified attacker took 25,000 BTC. Although there is no evidence, it has been suggested that the robbery may have been internal, in particular they may have been stolen by Jed McCaleb, although there is no evidence.
After the robbery, there was apparently a not-so-successful attempt to erase his trail, as the thief sold the Bitcoins and bought them again, then exchanged them for dollars again. Some Gox users followed in his footsteps, and even reached a Hong Kong IP address.
Gox Robo (744,408 BTC)
The second robbery occurred some time later, after the theft from the exchange. We move on to 2014, when 744,408 BTC was reported stolen or lost. The inspection revealed that the robbery had been going on “quietly” for many years. The assets were never returned.
- Pony’ Botnet
Although this attack is small in terms of the amount of money stolen, it is related to the number of affected cars.
For 5 months (September 2013 — January 2014), the criminals used a zombie computer network called Pony, with millions of infected computers.
They stole $ 220,000 in Bitcoins and other cryptocurrencies. They only had to run a line of code to get all the private keys of users with bitcoin wallets installed.
Later, the criminals used them to transfer Bitcoins to their own wallets.
- Silk Road (173.655 BTC)
This is one of the most controversial cases, as some call it a robbery, while others call it an act of justice.
Silk Road was a well-known Dark Web store that sold weapons, drugs, tasteless digital content, and a variety of illegal goods. The FBI, after a heavy investigation, managed to shut down this illegal market.
During the arrest and closure, 29,655 PTS belonging to this digital store were seized, and another 144,000 PTS belonging to the site’s founder, Ross Ulbricht.
The story will take another turn when Drug Enforcement agents Sean Bridges and Carl Force stole between $ 700,000 and $ 1 million in Bitcoin during the investigation, receiving seven years in prison for doing so.
- Bitfinex (121,256 BTC)
One of the largest exchanges in history is Bitfinex, founded in 2012 and based in Hong Kong. She was the victim of two robberies: the first of a smaller size in May 2015, when about 1,500 BTC was stolen, and the second and most important — on August 2, 2016, as a result of a security breach, when 119,756 BTC was stolen.
The exchange is still operating today, and according to the information, all users have returned their Bitcoins.
- BitFloor (24,000 BTC)
The crypto exchange, which was based in New York State, USA, was quite popular at the time because it allowed accepting cash in US dollars through LocalTill, supported by Bank of America.
On September 4, 2012, BitFloor reported a security breach, and that a group of attackers managed to steal 24,000 BTC from the exchange’s wallet. The statement reported the closure and denial of customers ‘ access to their funds, as they had virtually no funds after the theft.
The exchange was supposed to return the lost funds to customers, but on March 8, 2013, three months after the last refund (December 2012), it stopped responding. Her fears were justified when, on April 3, 2012, she temporarily disconnected from the Internet.
The exchange’s last communication was on April 17, 2013, and then operations finally stopped after their bank announced that they were going to close the exchange’s accounts. There was no data on this issue, but there was talk of closure due to money laundering operations.
- YouBit (4.000 BTC и 17% BTC)
South Korea is one of the most cryptocurrency-friendly countries to date, allowing for the development of regulated cryptocurrency exchange centers. Among them was YouBit, a fairly important crypto exchange that shut down after two computer attacks.
The first attack occurred in April 2017, when about 4,000 BTC was stolen, and the second occurred on December 19, 2017, when approximately 17% of the assets were stolen (it is unclear how much was stolen).
After this second attack, the company announced that its activities were being discontinued. 75% of the funds were promised to be returned, the remaining 25% will come from the liquidation of the company’s assets and assets.
- NiceHash (4,700 BTC)
The cryptocurrency cloud mining service has become one of the latest victims of thefts. The Slovenian company offers cloud mining solutions and allows users to easily mine with their own hardware.
Mark Kobal, the company’s CEO, announced in a Facebook live broadcast that 4,700 BTC had indeed been stolen. It was also stated about the interest in returning the funds to their rightful owners, for which a repayment plan was drawn up.
The biggest robberies in the history of altcoins
Some of the biggest robberies in history, as we saw in the first part, involve the theft of Bitcoins from various exchange offices (or illegal markets), but there are cases of theft of other cryptocurrencies. This suggests that altcoins are also not spared from theft.
Of course, they are not ahead of the list in terms of the number of stolen Bitcoins in the fiat equivalent, but other cryptocurrencies, primarily Ethereum, have also been seriously stolen.
- Coincheck (523 million Deutsche marks)
The Japanese exchange Coincheck started operating in 2014. On January 26, 2018, it was revealed that the exchange was the victim of a robbery of. 523 million German marks, which at the same time was equivalent to $ 534 million, which is by far the largest robbery in history.
The problem lies in the storage of cryptocurrencies. Coincheck used a simple hot wallet to store coins without even using a multi-signature wallet, making it easier for attackers to take control of the private key.
Despite the serious robbery, the exchange continues to operate as usual and has developed a plan to recover the stolen assets, which began on March 12, 2018. Japanese authorities are working to resolve the issue and are closely monitoring the exchange to ensure that security is adequate and that the stolen capital is returned.
- DAO (3.6 million ETH)
Ethereum is a platform that allows for many things, including the creation of smart contracts that enable the development of decentralized autonomous organizations (DAOs), named after the DAO — the first crowdfunding project of its kind.
The idea, though good, had a problem: the developed code. It appears that the code calling the DAO contained a programming error that allowed a third party to transfer 3.6 million Ethers worth about $ 50 million at the time.
It should be noted that the attacker assured that the transfer of funds was completely legal and should not be considered as theft. He even threatened legal action against those who tried to recover the lost funds.
- Parity wallet (stolen: 153,000 ETH; frozen: 513,774 ETH)
One of the strangest stories in the cryptocurrency world involves Gavin Woods, the founder of Parity and former lead developer of Ethereum, and has two parts.
The first incident occurred on July 19, 2017, when a total of 153,000 ETH, equivalent to approximately $ 32 million, was anonymously stolen from the wallets of Aeternity, Edgeless, and Swarm City. The reason for the theft is a failure in the Parity 1.5 utility itself.
The second incident occurred on November 8, 2017. To get to the bottom of the issue, we have to go back to January 2017, when a significant vulnerability was discovered in multi-signature wallets, but the developers felt that despite the potential problem, they would solve it sometime in the future.
And now, back in November, when user DevOpps199 mistakenly created what was initially thought to be a bug, which eventually led to the freezing of funds in wallets with multiple signatures. It was later revealed that this was due to an attempted fraud with the Parity wallet.
Initially, there was talk of a $ 280 million Ethereum block, but this figure was later lowered to 513,774. 16 ETH, which is equivalent to about $ 169 million.
Perhaps one of the most curious cases to date is that on July 17, 2017, the sale of CoinDash tokens through the ICO began — an Israeli project that was forced to close after a computer attack.
The attacker managed to gain access through a security hole in the direction of the wallet, taking control. But what happened after that is the first time that the attacker not only returned the stolen goods, but also gave more.
On September 12, 2017, the attacker, while maintaining his anonymity, sent the stolen 488 ETH to the CoinDash ShapeShift account. On September 19, 2017, he made another transfer in the amount of 10,000 ETH. Subsequently, there were two more transactions for 20,000 and 13,000 ETH conducted by this attacker, converting him into a Good Samaritan, as the total amount of his transfers was 43,000 ETH.
The identity of this, or these people, is unknown, but some say it could have been a strategy devised by the creators of the ICO to give themselves free advertising. Who knows.