Cyber thieves stole a total of $282,617,000 from cryptocurrency exchanges in 2019, according to a new report on crypto crime.
The blockchain analytics firm Chainalysis cites eleven exchange attacks in which hackers made off with a wide variety of crypto assets, including Bitcoin (BTC), Ethereum (ETH), XRP, Bitcoin Cash (BCH) and Litecoin (LTC).
According to the report, the largest hack of the year hit the crypto exchange Coinbene, with a total of $105,000,000 in Ethereum-based tokens stolen.
Next up is Upbit, which saw $49,000 in Ethereum stolen from the exchange’s hot wallet. The widely-publicized hack of Binance is number three on the list, with $40,000,000 in Bitcoin stolen through a combination of phishing attacks and viruses.
“The majority of funds stolen in exchange attacks end up being sent to other exchanges, where they’re likely converted into cash. However, a substantial portion of funds sit unspent, sometimes for years. In those cases, there may still be an opportunity for law enforcement to seize the stolen funds.”
Chainalysis says crypto exchanges are implementing stronger measures to protect users’ funds, citing a “sharp decrease in amount lost per hack.” But crypto criminals are quick to adapt.
“…At the same time, the most prolific hackers have also grown more sophisticated, both in how they carry out hacks and in how they launder their stolen funds afterwards. While this isn’t a positive development, it suggests that the measures adopted by exchanges are effective enough to force hackers to adapt in the first place.”
Crypto advocates are quick to point out that the Bitcoin network itself, which allows people to send value peer-to-peer without middlemen, remains secure, as opposed to the exchanges that keep getting hit by security breaches while holding Bitcoin on behalf of their customers.
Although thieves continue to find ways to hack into centralized exchanges that sell and store cryptocurrency, they remain unable to break the cryptography that protects BTC.
Crypto enthusiasts who support the utilization of Bitcoin as intended by its pseudonymous creator Satoshi Nakamoto – making peer-to-peer transactions without exchanges – urge crypto users to take control of their own private keys to access their holdings.
The annual “Proof of Keys” event, which took place earlier this month, calls upon crypto holders worldwide to withdraw their assets from exchanges and move them into their own digital wallets, protecting their funds against hackers who target exchanges.
Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.
Featured Image: Shutterstock/Gorodenkoff