The recent Upbit hack is a serious reminder about the dangers of storing your cryptocurrency on an centralised exchange. We have seen seven major hacks that happened this year in 2019, each getting bigger and bolder. Lesson? “Not your private key, not your cryptocurrency“.
The Nightmare of Cryptopia
Cryptopia became dark on January 15 after uncovering a cyber security breach with significant losses. The silent darkness enveloped throughout the rest of January and deep into February. The site could not be commented on during police investigations of a $16 million hack.
It’s not clear how Cryptopia was hacked, but investigators discovered during August that Cryptopia had collected users’ money into their cold wallet. The New Zealand exchange tried to regulate itself after the hack and reopened its trading services in March. But the revival didn’t make sense and the exchange was liquidated in May, 10 days later it filed for bankruptcy.
DragonEx lost $ 7 million
Singapore’s DragonEx lost an undisclosed amount of users in a March 24th hack. They initially declined to estimate how many but a few days later, via telegram they revealed that they had lost $7 million because of security breaches. DragonEx does not seem to promise to refund their users, as other exchanges did in 2019. Instead, they said they were working with a preliminary compensation plan, which would reimburse their users through Tether or Dragon Token.
$13 million Bithumb in March
The hackers targeted Bithumb in March for $13 million (EOS) and the Korean exchange knew that it had lost $6.2 million (XRP). Less than a year after a major hack: $31 million at the end of 2018. Bithumb suspects that the hack is internally related when it discovers an unusual withdrawal to one of their wallets. The exchange stated that they did not lose their users money in the hack.
Binance Hack: 7,000 Bitcoin Worth $40 Million Stolen
Hackers stole large amounts of 7,000.00 Bitcoin worth about $40.7 million from Binance in May this year. The world’s largest exchange of trading volume has found a weakness in its hot wallet, although they claim that only 2 percent of the total amount of money in the wallet during the time of the hack. The funds quickly turned over a network of smaller wallets and hackers tried to do laundry the stolen money. Some have been converted into fiat. In response, Binance postponed withdraw and deposit services for a week to strengthen security protocols. The exchange reopened its services on May 15th. In the meanwhile, it committed to repaying users from its emergency fund.
BiTrue $4.2 million stolen
Singapore’s BiTrue exchange lost $4.2 million in its user funds in June. Hackers targeted XRP ($4.01 million) and ADA ($231,800.00) during an internal access review process. by BiTrue users. They had learned that the hackers transferred 9.3 million XRP and 2.5 million ADA to various exchanges. BiTrue said it has collaborated with partner exchanges to freeze those funds and promise to reimburse all affected users.
Bitpoint is hacked $28 million
Japanese exchange Bitpoint lost $28 million in the July hack that hit 50,000 users. It did not known how the hackers violated Bitpoint security. The incident forced Bitpoint to stop trading for a month. Immediately after the hack, Bitpoint’s parent company, Remixpoint, promised to reimburse affected users. In Bitpoint, five supported cryptocurrencies (bitcoin, bitcoin cash, ether, litecoin and XRP) began for trading in August.
And now Upbit’s $49 million loss
Upbit is the latest hacking victim after losing $ 49 million at 9:00 UTC on November 26th 2019. An “extraordinary transaction” resulted in the loss of 340,000 Ethereum (ETH) in minutes. The exchange stated that the loss did not come from users’ money and they had suspended all expected functions for at least two weeks.
A year end is coming, these hacks represent the greatest risk and uncertainty of exchanges – users perform with their own and public wallets. What will happen in 2020? This is the hope for infamous and new names exchanges in the cryptocurrency ecosystem, as well as the opportunity for DEX decentralised exchanges to develop their own ecosystems.