The Top 3 Biggest Bitcoin Hacks in History

The more bitcoin gained value, the more cybercriminals started to target bitcoin exchanges to get their hands on the digital currency. It is estimated that close to $1 billion was stolen from cryptocurrency exchanges in 2018, which is almost three times the amount of the previous year.

In this article, you will be introduced to the biggest bitcoin hacks in history that have cost exchanges millions.

Biggest Bitcoin Hacks

Mt Gox

The Mt. Gox bitcoin theft was the biggest bitcoin hack in history. Interestingly, the now defunct Japanese bitcoin exchange was hacked not only once but twice.

Mt. Gox began operating in 2010 and quickly became the go-to bitcoin exchange. Its first hack occurred in June 2011 when hackers used a compromised computer belonging to an Mt. Gox auditor to walk away with 2,609 BTC.

The hackers were even able to manipulate the price of BTC on the exchange to $0.01 while they transferred the funds to an external address. Despite the hack, the company was able to weather the negative publicity and sustain its operations.

The second bitcoin hack happened in February 2014, at a time when the exchange handled over 70 percent of bitcoin transactions globally. Hackers were able to explore technical issues on the site to steal an estimated 850,000 BTC (worth around $450 million). This represented approximately 6 percent of all bitcoin in existence and was a significant portion of the total crypto market capitalisation at the time.

The theft was so massive that Mt. Gox halted its operations and eventually filed for bankruptcy. Moreover, news of the hack resulted in the price of BTC nosediving by 36 percent. While close to 200,000 BTC was eventually recovered, over 600,000 remain lost forever.

Recently, reports have surfaced that Mt. Gox may be making a comeback. For the past five years, the over 20,000 Mt. Gox creditors have been pushing for the liquidation of Mt. Gox assets in the Japanese courts. The exchange, on the other hand, plans to introduce a rehabilitation plan which will allow the exchange to resume operations and creditors to be paid in an equitable way.

It is important to note the assets in question have appreciated in value significantly since the exchange shut down. The over 200,000 BTC the exchange still holds (between bitcoin and bitcoin cash) is worth around $700 million. Taking into account the $530 million that was previously liquidated and still held by Mt. Gox, creditors are looking at a total of $1.2 billion in assets.

You can learn more about the affair by checking out Gox rising.

Mt.Gox hack losses: 850,000 BTC (worth around $450,000,000)

Bitfinex

Bitfinex is one of the largest cryptocurrency exchanges in terms of daily trading volumes. But in August 2016, the exchange was attacked and hackers made away with 120,000 BTC (worth $72 million at the time).

The hackers were able to find weaknesses in the platform’s Multisig wallet architecture to transfer the bitcoins. Within hours of the bitcoin heist going public, the price of bitcoin dropped from $607 to $515. Users received compensation for their lost bitcoins in the form of BFX tokens, which could be redeemed for US dollars on the exchange.

Bitfinex experienced another attack in June 2018, though this only managed to affect trading operations and no funds were lost.

Bitfinex hack losses: 120,000 BTC (worth around $72,000,000)

Bitstamp

Bitstamp was launched in 2011 as a safer alternative to Mt. Gox, which had already experienced a bitcoin hack. However, the opposite was the case with the Slovenian bitcoin exchange experiencing a cyber attack in January 2015.

An anonymous hacker managed to access Bitstamp’s hot wallet and transfer 19,000 BTC (worth around $5 million) to his or her wallet. The exchange suspended operations temporarily while it sought to make the platform more secure.

The company reassured its users that the majority of their funds were in cold offline wallets, and once operations resumed all balances were to be restored.

Bitstamp hack losses: 19,000 BTC (worth around $5,000,000)

Unfortunately, cryptocurrency exchange hacks will not disappear any time soon. Hence, it is always advisable not to store a large amount of bitcoin or other digital assets on exchange wallets.

To learn more about Bitcoin, download the Bitcoin Beginner’s Handbook for free.