Cryptocurrency and blockchain technology reached even greater heights of popularity in 2021, but it was also the year that hackers began to take full advantage of digital cryptocurrency exchanges stealing hundreds of millions of dollars throughout the year, including a single heist that totaled an amazing $600 million in stolen crypto.
Breitbart News has previously reported that thefts of cryptocurrency are on the rise, in just the last year there have been at least 20 hacks in which thieves stole at least $10 million worth of digital currency and six above $100 million. This is a stark contrast to traditional bank robbers who made less than $5 thousand during this time period, according to data from the FBI’s annual crime stats report.
Cryptocurrency exchanges are becoming increasingly popular as the primary way to buy and sell digital currencies. However, they may be more vulnerable than consumers think. 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 cannot be accessed without physical possession and must remain offline at all times for security purposes. But the rest is often stored in “hot wallet” systems in order to be sent out immediately to users when needed.
2021 saw some of the largest cryptocurrency hacks to date. This year was one of the worst on record for cryptocurrency hacks and robberies, with around 32 incidents reported amounting to approximately $2.99 billion in associated losses, according to a report from Crypto Head.
Here are just a few of the largest cryptocurrency exchange hacks in 2021:
Bitmart: $150 Million
The popular crypto exchange Bitmart faced a major loss in December 2021 after it lost $150 million in cryptocurrency. Bitmart issued a statement one day stating that it would be “temporarily suspending withdrawals until further notice” after discovering a “large-scale security breach” connected to two “hot wallets.” Unfortunately, the damage was done and the cryptocurrency was lost.
The cybersecurity firm that initially discovered the incident, Peckshield, described the hacks as a “pretty straightforward: transfer-out, swap, and wash.”
Poly Network: $600 Million
On August 10, the Poly Network was hacked resulting in a loss of $600 million worth of investors’ money in one of the largest windfall thefts in cryptocurrency history. Poly’s leadership panicked and immediately published a letter in which they begged the hacker for the money back
“Dear Hacker,” the letter began. “We want to establish communication with you and urge you to return the hacked assets. The amount of money you hacked is the biggest one in DeFi history. Law enforcement in any country will regard this as a major economic crime and you will be pursued. It is very unwise for you to do any further transactions. The money you stole are from tens of thousands of crypto community members, hence the people. You should talk to us to work out a solution.”
Surprisingly, the letter actually worked. The hacker began to return funds to the Poly Network, claiming that they only hacked the exchange for fun and to reveal how poor its security was. By the end of August, all of the money had been returned.
Vulcan Forged: $140 Million
Vulcan Forged, a company that manages a number of crypto services and products including a DeFi platform and NFT market, faced a major hack in December losing $140 million. The hacker reportedly obtained access to the private keys of the 96 wallets owned by the platform and stole all of the money stored within.
The hacker reportedly stole an average of $1.46 million per wallet. Vulcan surprisingly refunded all lost money to investors, likely in an effort to regain their trust following the major breach.
These are just a handful of the largest cryptocurrency hacks in 2021. As cryptocurrency continues to become increasingly popular, it’s likely that we’ll see more stories like this in the coming years. You can keep track of these at Breitbart Tech here.