Satoshi Nakamoto, the supposed bitcoin founder, quoted in his whitepaper,
“What is needed is an electronic payment system based on cryptographic proof instead of trust, allowing any two willing parties to transact directly with each other without the need for a trusted third party.” The loss of over $500 million during the transaction of cryptocurrency through bitcoin exchanges and custodial wallets violates the significant rule of cryptomarket. Here are the breathtaking top cryptocurrency exchange hacks of 2019:
Cryptopia (New Zealand)
In January 2019, the Exchange discovered the “security breach” when the electricity went off for a few minutes. The Exchange had channelled users’ funds into a pooled wallet which was hacked. Cryptopia lost around $16 Million USD due to unchecked security practices. The Exchange tried to reopen, but ultimately it filed for bankruptcy. This marks the beginning of Exchange hacks in 2019.
Coinbene(Singapore) loses over USD 100 million
In March 2019, the bitcoin community got suspicious over the announcement that Coinbene is undergoing maintenance. The problem began when the funds started to move out of the hot wallet of Exchange mysteriously. However, soon it was uncovered that several altcoins were stolen which included pundi X (NPSX), Maximine Coin (MXM), Huobipool token (HPT) and Undoo (UDOO). But thankfully, Exchange promised 100% compensation on the funds lost.
In May 2019, the breach in mighty Binance Exchange awestruck investors worldwide. It indirectly exclaimed that funds in any bitcoin exchanges are not secured when the infamous Binance Exchange can be hacked. Hackers managed to use phishing scam and malware to steal a whopping $40.7million (7000 BTC) from the hot wallet of Exchange. Binance claimed that major funds were in cold storage; hence there is no major loss to users.CEO Changpeng Zhao thanked the community for cooperating in the worst days of Binance. This incident was one of the dreadful top cryptocurrency exchange hacks of 2019.
In June 2019, the cryptocurrency Exchange Bitrue faced the major hack over its fund in the hot wallet. Though only 90 users were affected but monetarily, almost $5 million was stolen. But, Bitrue promised the full repayment of funds to their investors.
GateHub(UK and Slovenia)
In June 2019, the UK and Slovenia based cryptocurrency exchange suffered from the loss of $10 million worth of Ripple. The culprit(s) hacked the system to access the highly secured encrypted keys, but still, there is a question mark against their procedure. But, GateHub has managed to recover some of the stolen funds.
In July 2019, Japanese Exchange Bitpoint lost a gigantic $28 million where more than 50,000 users were targeted. The severity of breach halted the Exchange from operating for 30 days. Luckily, Remixpoint, the parent company of Bitpoint, promised to reimburse the funds.
UPbit (South Korea)
In November 2019, hackers managed to steal $50 million worth of Ether from South Korean Exchange UPbit.It turned out to be the biggest hack of 2019 in terms of monetary value. Though Exchange is still under investigation UPbit assures that there won’t be lost from its users’ funds. This hack also counts among the top cryptocurrency exchange hacks of 2019.
Cryptocurrencies are meant to be relatively secured digital assets, but most of the times, Exchanges are at the verge of risks. There must be revised norms for Cryptocurrency Wallet and Exchange.
Thus, it can be concluded that exchanges must revive their security norms as well as implicate the proper encryption while storing the funds in a hot wallet. Every Exchange must outline the security measures for their investors. Also, exchanges should store their digital assets in cold wallets as to avoid significant attacks. The lesson that traders and investors must learn that they should save their extensive crypto holdings away from third party wallets.