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McGill recommends two-factor authentication or hardware keys, which are essentially passwords kept on offline devices. There are also basic security measures users can take when accessing their crypto account. “Do they have people responsible for cybersecurity? Does the company have a good track record? What’s the size of the company? How many employees does it have? Those are all indicators that you can have confidence that that business is going to secure your assets in a responsible way,” says Robinson. When using a crypto wallet or exchange, experts say users should scrutinize the scale and professionalism of the company behind it. How can cryptocurrency holders protect themselves?

“More often than not, hackers successfully get away with stolen funds as cryptocurrency is virtually untraceable and easily disguised by laundering it through wallets in a matter of minutes,” Adam Morris, co-founder of Crypto Head, told CNN Business. Some companies might have insurance to cover losses, but the level of coverage - if there is any at all - varies by platform.Īs for the cryptocurrency that’s stolen, it could be gone forever. While many banks typically offer deposit insurance up to a certain amount, there is no such promise when holding crypto assets in a third-party service. BitMart, for example, pledges to cover all stolen assets.Īccording to crypto-crime analyst Joe McGill of TRM Labs, if an entity does not have the ability to compensate impacted users, there is still the chance that law enforcement - like the IRS Criminal Investigations Cyber Unit - is able to recover the stolen funds.īut there is no guarantee. Just because an exchange suffers a hack doesn’t necessarily mean you lose all your money.Įach crypto service has varying levels of resources to cover hacks. “With the industry growing at an exponential rate and relying on open source technology, this leaves platforms open to exploitation when hackers are able to find a weakness in the code.” “What’s clear from the majority of these attacks this year is that it’s often a vulnerability that’s being exploited,” says Rebecca Moody, head of research at Comparitech. The Badger DAO hack resulted in the loss of $120 million.

Major examples include Poly Network as well as a more recent hack of Badger DAO, a platform that gives users vaults in which to store bitcoin and earn profit.

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DeFi software applications cut out exchanges all together, as they are run directly on top of blockchain platforms, and hacks of these services are usually due to coding errors or issues with design of apps, according to Robinson. Another is the Coincheck attack in 2018, which saw roughly $530 million stolen, making it the biggest crypto heist ever - until the Poly Network incident this year, according to Comparitech’s data.ĭeFi services are a newer part of the crypto world. The recent BitMart hack was one such example. This makes them more accessible for users, but also potentially more vulnerable to savvy hackers. These exchanges store a user’s assets in “hot wallets,” or digital wallets that are connected to the internet. The two main targets of crypto hacks currently are centralized exchanges and decentralized finance (DeFi) services, according to Tom Robinson, chief scientist at London-based crypto compliance firm Elliptic.Ĭentralized exchanges have been the prime target of hacking groups for several years.

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Here’s what you should know about what’s happening – and how to keep your digital assets safe. And these incidents may only continue due to increased cryptocurrency usage, according to financial tech experts. Security incidents like these are not new in the crypto world, but the size of these hacks appears to be growing as cryptocurrency prices have surged over the past year, drawing more mainstream attention.įive of the 10 largest crypto thefts of all time have happened this year, according to data compiled by consumer website Comparitech. (Photo illustration by Chesnot/Getty Images) Chesnot/Getty Images Bitcoin has increased by over 50% over one month and over 450% over one year. Cryptocurrency, which traded for less than a dollar 12 years ago, peaked on Thursday at around $ 66,895, its all-time high. The value of Bitcoin (BTC) has exceeded the threshold of 66,895 dollars for the first time in his history. PARIS, FRANCE - OCTOBER 21: In this photo illustration, a visual representation of the digital Cryptocurrency, Bitcoin is on display on Octoin Paris, France.

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