By In the Cryptocurrency Anti-Money Laundering Report of Q3 2018, CipherTrace reported a growing number of cryptocurrency thefts, including several heists in the $20-$60 million range, totalling over $166 million. Although nothing can compare to the Coincheck and BitGrail thefts that occurred earlier this year, CipherTrace has reported that in the third quarter of 2018 there have been several smaller but nonetheless serious crypto thefts.
Tinker, Taylor, Soldier, Spy
If the recent Coincheck and BitGrail thefts have taught the crypto industry anything, it is that the early detection of a hack is crucial. This was evidenced by the recent hack of the cryptocurrency trading platform Taylor, which occurred during the company’s Initial Coin Offering (ICO). Taylor lost all of the proceeds raised by its ICO, approximately $1.35 million, along with its TAY tokens. When they suspected that the hacker was attempting to launder the stolen tokens by dumping them on the IDEX platform Taylor immediately instructed IDEX to temporarily delist the TAY tokens, however, the damage was already done.
Blockchain’s 51% Hack
Although many have thought blockchain to be impenetrable, the Bitcoin Gold blockchain attack has shown that where there is a will, hackers usually find a way. In this hack, these thieves were reported to have used rented computers to gain more than 51% of the network hash rate. This “51% attack” enabled the hackers to prevent valid transactions from occurring as well as to reverse previously completed transactions on the blockchain, which resulted in a $18 million loss for Bitcoin Gold.
Wallets, Wallets, Wallets
Vulnerable platforms offer hackers a further means to perform their daring thefts as seen in the recent hack of Geth, where hackers took advantage of insecurely configured Geth clients to breach their Ethereum wallets. Once Geth clients unlocked their accounts on the JSON-RPC interface the port stayed open for the entire session, allowing hackers to breach these clients’ Ethereum wallets and get away with more than $20 million in Ethereum.
This quarter also saw Bancor fall prey to a hack where the theft was engineered by hackers who were able to breach a wallet which was being used to update some smart contracts, forcing the firm to temporarily shut down. Bancor, which launched one of the higher-profile ICOs of 2017 and netted $153 million in its token sales, had hackers walk away in July 2018 with Ethereum, BNT and NPXS tokens totaling approximately $23 million.
The world’s sixth largest cryptocurrency exchange, the South Korean based Bithumb, was also hacked through an “unauthorized access to its online wallets”. Once discovered, deposits were urgently disabled and all coins stored in online wallets were quickly moved to more secure offline wallets in order to prevent the hack from going any further. Unfortunately, by the time that Bithumb managed to stop the hack it had lost $30 million.
High Stakes on Exchanges
The two largest hacks of this quarter targeted two eastern exchanges, lending more urgency to the apparent need for better threat detection and prevention. Coinrail, the Korean based exchange, lost around $40 million worth of altcoins (ICO-issued tokens). These tokens included NPXS, Aston X, Dent and Tron which were being maintained on Coinrail’s server, however, when the hack was discovered they were moved offline. As recently as September 2018, hackers stole a further $60 million from the Japanese cryptocurrency exchange Zaif, operated by Tech Bureau, causing serious concerns among investors and authorities.
With the three-fold increase in crypto theft during 2018, do your crypto investments feel safe? Give us your thoughts in the comments below.
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