The list of the biggest crypto-heists of 2021 is here for you. Digital currencies are very real and very seductive. Yet here’s a sobering thought: You never know when a hacker will make off with your life savings.
In the world of cryptocurrencies, it is no secret that fraud and theft are rampant. The largely unregulated landscape of digital finance is rife with criminality. Add to that the cybersecurity vulnerabilities of the infrastructure, the hordes of money-hungry cybercriminals scouring the internet for an unsecured hot wallet or exchange zero-day, and you have a perfect recipe for getting robbed.
Biggest crypto-heists (2021)
It’s also readily apparent that cybercrime is getting worse. According to a study put out by Crypto Head in August, this year was one of the worst on record for cybercrime. Some 32 incidents were reported, with the estimated associated losses equaling $2.99 billion. That’s up from last year’s numbers, which were, themselves, a 40 percent increase from 2019’s reported incidents. Since Crypto Head’s report came out, a smattering of exchange hacks have continued to prove its central thesis correct.
BadgerDAO is an ambitious decentralized finance project. On Dec. 2, unknown hackers managed to break into the BadgerDAO project. The loss was about $120 million. A few hours after the announcement of the attack, the hacker said he had been hacked as well, but claimed he didn’t know how to transfer the funds.
Just a few days after BadgerDAO got robbed, $150 million disappeared in a plume of digital smoke from the coffers of the popular crypto exchange BitMart. On the day in question, the platform issued a statement in which it said it would be “temporarily suspending withdrawals until further notice” after discovering a “large-scale security breach” connected to two “hot wallets”—digital crypto accounts connected to the internet. Unfortunately, the “pretty straightforward: transfer-out, swap, and wash” operation by the hacker at BitMart was a success. The exchange lost more than 90% of its total trading volume in one day, and it could lose more in the near future.
The largest cryptocurrency theft in history is the story of the Poly Network. On August 10, the exchange was reportedly hacked, and about $600 million of investors’ money was stolen. Poly’s leadership frantically put together an online plea to the anonymous hacker asking for their money back. “Dear Hacker,” the letter began, and want a safe return of the stolen assets.
The letter was largely greeted with derision and bemused sympathy online, and no one actually believes that the stolen money will be seen again. However, Poly’s tactic worked! The hacker, whoever the hell they are, has begun to return the stolen funds—later claiming in blockchain-inscribed memos that they only ever hacked the exchange “for fun” and to reveal a glaring security hole in Poly’s system. By the end of August, the thief has reportedly returned the entirety of the massive haul.
After being hacked in August, a Japanese cryptocurrency exchange, Liquid, lost a reported $97 million due to a security breach of their multi-party computation (MPC) system of custody. Blockchain analysis suggests that the hack took place during a large transfer of cryptocurrencies from a single wallet to many others. As of now, it’s unclear who or what is behind the theft.
Another unfortunate victim is Vulcan Forged. They manage a number of different crypto services and products, including a DeFi platform, an NFT market, and several play-to-earn token-based video games. Anyway, Vulcan reportedly got robbed of $140 million earlier this month, when a hacker somehow managed to get ahold of the private keys to 96 of the platform’s wallets and made off with every last cent inside of them. According to estimates, the hacker stole an average of $1.46 million per wallet. Vulcan actually did a great thing by refunding all the money that was lost by their investors. It’s a very charitable thing to do. It almost certainly helped them save face.
There’s an unfortunate tale of Thodex, a Turkish crypto exchange that lost $2.7 billion of investor money in a massive pump and dump scheme. The exchange unexpectedly shut down in April and the founder, Faruk Fatih Ozer, 27, has not been heard from or seen by anyone since. The stock market’s decline triggered turmoil throughout Turkey, where government officials rounded up and detained a large number of people, including some of Ozer’s relatives. However, Ozer himself was not among those detained.