2018 was a Year of Huge Losses to Cryptocurrency Heists
A market report on the value of cryptocurrency lost to thieves shows that it is set to surpass the $1 billion mark at the end of 2018. The end of 2018 Q3 report shows that $927 billion in cryptocurrencies were lost to spooks, hackers, and other marauders online with Q4 figures yet to be tallied. In contrast, in 2017, the losses recorded came to $731 million.
A comprehensive look at losses recorded in 2018 up to the end of September was undertaken by Cipher Trace cryptocurrency Intelligence.
The Major Thefts of 2018
So, what was responsible for the massive hike in losses? A look at the incidents reported during the year will provide a quick clue.
The biggest hack in history until the Coincheck occurrence was the Mt Gox one which led to the loss of $487million. However, in January 2018, Coincheck walked into the history books when hot wallets hosting NEM tokens were hauled into the unknown.
This case has become the eye-opener to major exchanges around the globe. Now, exchanges have learned to store tokens and coins in cold wallets to minimize online hacks.
The South Korean exchange lost $40 million to hackers during a network breach. Coinrail is listed among the Top 90 global exchanges and during the hack, some altcoins were lost.
The losses were:
- NPXS tokens $19.5m
- Dent $5.8m
- Tron $1.1m
- Aston X $13.8m
It is important to note that the losses arose from an intrusion into Coinrail and not the specific companies who issued the tokens.
The Bithumb Hack
Bithumb is another Korean exchange that lost $31 million to hackers in the course of 2018. Bithumb is listed among the Top 10 global crypto exchanges with its huge trading in Ethereum and Bitcoin Cash.
The exchange was compromised when hackers attacked some wallets on the exchange. This attack was another reason to implore people never to store their tokens and coins on exchanges.
ZAIF is a prominent cryptocurrency exchange in Japan, and it was hit by the theft bug in September 2018. The attack led to the loss of Monacoin, Bitcoin Cash and Bitcoin. This attack was another dent on the vulnerability index of cryptocurrency exchanges around the world.
The attack also led to the rollout of stringent guidelines by the Japanese authorities in other to stem the losses and plug known loopholes.
Other losses recorded during 2018 in the crypto sphere included incidence of fraudulent ICOs, missing tokens and coins as well as loss of private keys.
It might be considered understandable that the crypto world is yet in its infancy and as such, best practices are still evolving in the security considerations.
There is a great cause for concern that the humongous losses of cryptocurrencies to fraudsters and hackers were in 2018 are regrettable. However, as exchanges, traders and investors take to known safeguards, hopefully, the losses might be stemmed in the coming year.
DisclaimerThe writer’s views are expressed as a personal opinion and are for information purposes only. It is not intended to be investment advice. Seek a duly licensed professional for investment advice.
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