The year 2022 has been a record-breaking one for crypto projects hit with attacks and drained of funds. According to blockchain analysis firm Chainalysis, over $2 billion in crypto assets have been lost to software exploits in the first half of the year alone. Major hacks include Crypto.com ($35 million), Qubit QBridge Hack ($80 million), Wormhole ($325 million), IRA Financial Trust ($37 million), Axie Infinity Ronin Bridge ($625 million), and Beanstalk ($182 million). The total amount of funds stolen adds up to an astonishing $2.07 billion.
In response to these attacks, companies are taking steps to protect their assets by transitioning to multi-factor authentication, reclassifying as DAOs, and replenishing stolen funds. Chainalysis will release a wrap-up report next year detailing the full accounting of the year’s attacks and providing insight into how companies can better protect themselves from future hacks. It is clear that 2022 has been a difficult year for crypto exchanges, and it is likely that the industry will continue to face security challenges in the coming years.
1. Ronin bridge hack — $612 Million
The Ronin bridge hack of March 23, 2022, remains one of the most notable cryptocurrency breaches to date, with approximately $612 million in Ethereum and USD Coin stolen from the Horizon Bridge, a link between Ethereum, Bitcoin (BTC), and BNB Chain to Harmony’s layer-1 blockchain. The U.S. Treasury Department updated its SDN list to reflect the possibility that Lazarus Group was behind the exploit.
Blockchain forensics firm Elliptic attributed the hack to the North Korean cybercriminal syndicate Lazarus Group. It appears that they targeted Harmony employee login credentials and deployed automated laundering programs to move the stolen funds. This attack has caused a great deal of disruption in the cryptocurrency market, as it is one of the largest hacks ever seen in this space. It is important for investors and users alike to be aware of such threats and take appropriate measures to protect their assets from malicious actors.
2. Poly Network — $611 Million
In August 2021, the Poly Network decentralized finance platform suffered a major hack, resulting in over $600 million being stolen by an attacker who exploited a vulnerability. This included $33 million worth of Tether, prompting the developers to issue an appeal on Twitter. Fortunately, after two days around $300 million was recovered and it appeared that the hacker had only conducted the attack out of “fun” or as a challenge.
Unfortunately, the March 2022 attack on the Ronin Network, linked to North Korea’s state-backed Lazarus Group, was not the last time hackers targeted decentralized finance platforms. A whopping $625 million in Ethereum and USDC stablecoin funds were stolen in the breach. Binance was able to recover $5.8 million of the stolen funds a month later, making it the largest hack in history and highlighting just how vulnerable these networks can be to malicious actors.
3. Binance (Binance Smart Chain) — $566 Million
In October of 2022, the Binance exchange was hacked and over $570 million worth of BNB tokens were stolen. The hacker used a cross-chain bridge, BSC Token Hub to create and withdraw 2 million extra tokens. Thankfully, thanks to CEO Changpeng Zhao’s quick action, most of the stolen funds were not taken by the hacker. However, some $100 million were still moved around to other chains.
The hack exposed the need for stronger blockchain security because of a bug in a smart contract, making it clear that even with advanced security measures, malicious actors can still find and exploit vulnerabilities to steal funds. As such, it is important for exchanges and other blockchain-based businesses to remain vigilant and take all necessary steps to protect their users’ funds.
4. Coincheck — $500 Million
The Coincheck hack of 2022 was one of the biggest crypto exploits in recent years. In this incident, hackers were able to gain access to the exchange’s hot wallet and steal over $500 million worth of NEM tokens. This attack highlighted the importance of security protocols for exchanges, as it demonstrated how vulnerable they can be if proper measures are not taken. As a result, many exchanges have since implemented more stringent security protocols to protect their customers’ assets from malicious actors. Additionally, regulators have also stepped in to ensure that exchanges are compliant with the necessary regulations and are taking the necessary steps to protect their users.
5. Mt. Gox — $473 Million
Mt. Gox was among the initial chief crypto exchanges and had two massive hacks during its existence. In 2011, Mt. Gox lost 25,000 bitcoins worth about $400,000 in its first significant crypto attack. Afterward, in 2014, Mt. Gox encountered another hack and misplaced nearly 650,000 of its consumers’ bitcoins and roughly 100,000 of its own – 7% of all bitcoins at the time amounting to$473 a million approximately. Verification showed that the coins were looted from the company’s hot wallet.
More recently, FTX filed for Chapter 11 bankruptcy on November 12, 2022, after a hack where around $446 million in tokens were stolen from wallets allegedly belonging to FTX. It is still unclear who stole the assets and a “substantial amount” of the exchange’s assets are missing or have been stolen. These events demonstrate how vulnerable digital asset exchanges can be to malicious actors and how important it is for users to take extra precautions when storing their funds.
The recent hacks of Binance, Coincheck, Mt. Gox, and FTX have demonstrated that cryptocurrency exchanges are vulnerable to malicious actors. These incidents have highlighted the need for tighter blockchain security due to bugs in smart contracts as well as the importance of taking extra precautions when storing funds. Exchanges must remain vigilant and take all necessary steps to protect their users’ funds if they want to remain competitive in the future.
6. FTX — $446 Million
FTX, a popular digital asset exchange, filed for Chapter 11 bankruptcy on November 12th, 2022 after the theft of around $446 million in tokens from wallets allegedly belonging to FTX. The company is still unsure who was behind the theft and a substantial amount of its assets are missing or have been stolen. This is one of the largest crypto thefts ever reported and has caused significant disruption to the cryptocurrency market.
In response to this incident, FTX warned users to delete their apps and not visit the website as it may contain malware. The company is making efforts to secure all assets that were affected by the hack and have stated that it will reimburse customers for any losses incurred due to the theft. It remains unclear how long it will take for FTX to recover from this incident but it is clear that this event has had a major impact on the cryptocurrency market.
7. Wormhole — $326 Million
In a recent attack on Wormhole, a widely-used bridge for decentralized finance protocols, attackers were able to steal $326 million worth of WETH tokens. WETH is an Ethereum-pegged token used in the DeFi ecosystem to facilitate fund transfers. This brazen attack was enabled by an upgrade that was pushed to the project’s GitHub repository but not integrated into its live version. Approximately $47 million in SOL tokens were stolen, making this the most significant attack on Solana, a rival blockchain to Ethereum.
In response to this incident, Jump Trading, Wormhole’s parent company, stepped in and replaced all stolen funds so that the bridge could be running again. This event serves as a reminder of how vulnerable these decentralized networks can be and highlights the importance of security measures when dealing with digital assets. It is essential that developers take extra precautions when deploying code updates and ensure that their systems are secure from potentially malicious actors.
8. Wormhole bridge exploit — $321 Million
On February 2nd, 2022 an attack on the Wormhole token bridge resulted in the theft of 120,000 wETH tokens worth $321 million. The perpetrator was able to exploit a bug in the smart contract, creating fake wETH on the Solana blockchain (SOL) and exchanging it for ETH. This exploit is now rated as the biggest exploit of 2022 and is the third-largest protocol-related loss so far this year.
In February 2022, the Solana-based project Wormhole was subject to a massive hack that resulted in the theft of $325 million and up to $47 million worth of SOL tokens. This attack exploited a newer version of the project’s GitHub repository that had not yet been deployed onto the main net, making it one of the largest breaches ever on Ethereum’s rival platform – Solana. These two attacks have caused significant losses for both projects and have highlighted how important security measures are when dealing with cryptocurrency protocols.
9. Bitmart — $196 Million
The Bitmart hack of 2022 was one of the most wrecking cryptos taken advantage of as of late. In this occurrence, programmers had the option to get sufficiently close to the trade’s hot wallet and take more than $150 million worth of Bitcoin and other advanced resources. This assault featured the significance of safety conventions for trades, as it showed the way that weak they can be in the event that legitimate measures are not taken. Accordingly, many trades have since carried out more rigid security conventions to safeguard their clients’ resources from malevolent entertainers. Moreover, controllers have additionally stepped in to guarantee that trades are agreeable with the fundamental guidelines and are doing whatever it takes to safeguard their clients. All of the tokens were sent to a wallet identified on Etherscan as the “BitMart Hacker.”
10. Wintermute hack — $160 Million
The Wintermute hack was a major blow to the cryptocurrency market in September 2022. The UK-based crypto market-maker suffered from a compromised hot wallet that saw approximately $160 million across 70 tokens transferred out. Blockchain cybersecurity firm CertiK claimed an exploit likely caused the attack in Profanity, an app that allows users to generate vanity crypto addresses. Conspiracy theories alleging the hack was an “inside job” were debunked by blockchain security firm BlockSec.
In response to the attack, Wintermute’s CEO offered a 10% bounty to the hacker if they returned the funds. This was on top of the project owing an additional $200 million to other participants in the market. Unfortunately, no one has come forward with any information about who may have been responsible for this massive theft of funds and it remains unsolved to this day.
11. Beanstalk — $182 Million
On April 18, 2022, the decentralized finance (DeFi) platform was exploited by an attacker who managed to borrow $1 billion in just 13 seconds. This attack resulted in the hacker taking a 67% controlling stake in the project and approving a transfer of funds to their wallet. The DeFi platform that suffered this exploit was Beanstalk Farms, a stablecoin protocol, which resulted in the loss of an estimated $182 million.
The attacker used a flash loan to purchase governance tokens and pass two malicious proposals. After further investigation, it was determined that the actual amount lost due to the exploit was only $76 million. This is still a significant amount of money, but it is much less than what was initially estimated. The incident serves as a reminder of how quickly malicious actors can take advantage of vulnerable systems and underscores the importance of security measures for DeFi platforms.
12. Wintermute — $162 Million
The cryptocurrency market maker Wintermute suffered a devastating attack in September 2022, resulting in a loss of around $162 million. The project was already in debt to other participants for an additional $200 million, and the CEO offered a 10% bounty to the hacker if they returned the funds. Blockchain cybersecurity firm CertiK identified a vulnerable private key generated by Profanity as the source of the attack, while conspiracy theories alleging an “inside job” were debunked by blockchain security firm BlockSec.
The attack on Wintermute had far-reaching implications for both the company and its customers. Not only did it cause significant financial losses, but it also damaged trust in the platform and caused many investors to question its security protocols. Furthermore, with no clear culprit or motive behind the attack, it is difficult to determine what measures can be taken to prevent similar incidents from occurring in the future. As such, Wintermute must take steps to ensure that their platform is secure and reliable going forward if they are to regain the trust of its customers.
13. Harmony bridge hack — $100 Million
The Harmony Bridge hack is one of the largest cryptocurrency thefts in history, with an estimated $100 million worth of digital assets stolen from the Horizon Bridge linking Ethereum, Bitcoin (BTC), and BNB Chain to Harmony’s layer-1 blockchain. Blockchain forensics firm Elliptic has attributed the hack to North Korean cybercriminal syndicate Lazarus Group, who are believed to have targeted Harmony employee login credentials in order to breach the platform’s security system and deploy automated laundering programs to move their stolen funds.
The attack was initially thought to have been much larger than it was due to a vulnerability in the BNB Chain that allowed for around $600 million worth of digital assets to be drained from its cross-chain bridge, the BSC Token Hub. However, due to swift action by the Harmony team and other blockchain security experts, roughly over $400 million worth of digital assets were frozen on the blockchain and possibly stuck in cross-chain bridges on the BNB blockchain side. This prevented further losses and highlighted the importance of robust security measures for any blockchain-based platform.
14. The Qubit Finance bridge — $80 Million
An intruder recently exploited the Qubit Finance protocol on BNB Smart Chain to create a digital asset using bridged Ether (ETH) and steal more than $80 million of BNB. This enabled them to borrow various cryptocurrencies against the unbacked bridged ETH, ultimately resulting in the depletion of the protocol’s funds.
An attack on October 6th resulted in the theft of approximately $100 million via the BSC Token Hub cross-chain bridge. Initially, it was believed that over $600 million had been taken advantage of due to a vulnerability that caused up to 2 million BNB tokens to be generated. Fortunately, several of these assets have been frozen on the blockchain and there may be more that are stuck in other cross-chain bridges related to the BNB network. This is a major setback for Qubit Finance and other DeFi protocols as it highlights how vulnerable even large networks can be to malicious actors and the importance of having robust security measures in place.
15. Rari Fuse exploit — $79.3 Million
On April 30th, 2022 the Rari Fuse exploit caused an estimated $79.3 million in damages. The attacker was able to take advantage of a reentry vulnerability in the smart contracts, granting them access to call a malicious function. Consequently, Tribe DAO, comprising Rari Capital and other DeFi protocols, decided to compensate victims of the breach.
Another major DeFi exploit occurred on Jan 28th when Qubit Finance, a DeFi protocol on BNB Smart Chain, was targeted by an attacker who duped the protocol’s smart contract into believing they had deposited collateral to mint an asset representing bridged Ether (ETH). By repeating this process multiple times, the attacker was able to borrow multiple cryptocurrencies against the unbacked bridged ETH and drain the protocol’s funds, resulting in over $80 million worth of BNB being stolen. These two exploits highlight how vulnerable decentralized finance protocols can be and how important it is for developers to ensure that their code is secure.
16. Beanstalk Farms exploit — $76 Million
Beanstalk Farms, a stablecoin protocol, suffered an exploit on April 18, 2022, resulting in a loss of $76 million. The attacker used a flash loan to buy governance tokens and pass two malicious proposals. Flash loans are a type of loan that is taken out and repaid within the same transaction, allowing for quick access to funds without having to go through the traditional lending process. In this case, the attacker was able to borrow $1 billion and take control of Beanstalk Farms in just 13 seconds.
Initially estimated to have cost around $182 million, the exploit was eventually contained. This is due to the fact that Beanstalk Farms had implemented several security measures such as multi-signature wallets and timelock contracts which prevented further losses from occurring. Despite this, it still resulted in a significant financial loss for those involved with Beanstalk Farms. It serves as a reminder of how quickly malicious actors can take advantage of vulnerable DeFi protocols if proper security measures are not in place.
17. Crypto Exchange Deribit — $28 Million
Deribit, cryptocurrency options, and futures exchange have been the victim of a major hack with $28 million drained from its hot wallet. The attack was discovered on June 29th, 2022, and Deribit immediately took action to protect their clients’ assets by suspending withdrawals. Luuk Strijers, the CEO of Deribit, released a statement discussing the details of the hack and how it was carried out.
The incident is yet another example of the growing problem of crypto hacks that have been occurring more frequently in recent years. With more money being invested in cryptocurrencies, hackers are becoming increasingly sophisticated in their methods for stealing funds. It is important for exchanges to take extra precautions when it comes to security in order to protect their customers’ assets from these malicious actors. Despite this unfortunate event, Deribit has reassured its customers that their funds remain safe and secure.
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The Bottom Line
The cryptocurrency industry has seen a surge in recent years, however, concerns about hacking have dampened investor sentiment. To rectify this, developers need to enhance security protocols for blockchain and other networks to regain public trust in digital assets. Additionally, the lack of regulation for investing in cryptocurrencies has exacerbated the situation; prices have been dropping since 2022, and it is uncertain if they can recover.
Hacking activity and attack vectors have become increasingly sophisticated in recent years. Attackers are now using more advanced techniques such as flash loans, multi-signature wallets, and timelock contracts to exploit vulnerable DeFi protocols. Additionally, hackers are also targeting crypto exchanges with hot wallet hacks to steal funds from unsuspecting users. It is important for developers to be aware of these attack vectors and take the necessary steps to protect their networks from malicious actors. By implementing security measures such as multi-signature wallets and timelock contracts, developers can ensure that their protocols are secure and protected from potential attacks.
They opened their laptops and got to work on the platform’s code, with aid from some friends and Finney, Day’s feline companion (named in homage to Bitcoin innovator Hal Finney), who perched atop his shoulder for encouragement. The project was built on the Ethereum blockchain – a public register where transaction records are stored – which meant that any attempts at sabotage could be tracked. The probe into the occurrence discovered that the platform was deceived into greatly diminishing tokens possessed by its clients and selling them to the assaulter for a considerably discounted value, although it took weeks to pinpoint precisely what had happened. The thieves absconded with $16 million worth of assets in total.
Data breaches have become a major issue in the crypto space, with the most recent example being the Deribit hack of 2022. In this incident, hackers were able to exploit a vulnerability in the platform’s code and steal $28 million worth of assets from its hot wallet. This attack serves as a reminder that even the most secure platforms can be vulnerable to malicious actors if proper security protocols are not in place. As such, it is important for exchanges to take extra precautions when it comes to security in order to protect their customers’ assets from these malicious actors.
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