3 Cyberattacks in Cryptocurrency Exchanges that Serve as a Lesson for Traders
Many users in the Middle East tend to store their cryptocurrencies on different exchanges. But have you considered the possibility of your cryptocurency exchange getting hacked? As cryptocurrencies started to offer the world an easy and quick way to exchange money, cybercriminals realized that that they had one more target to attack – the cryptocurrency exchanges.
These exchanges store hundreds of cryptocurrencies worth millions and billions of dollars that offer the hackers an easy way to get their hands on a massive amount of money with a single infiltration.
The cryptocurrency industry is still in transition, hence many exchanges were not able to strengthen their security and their users had to suffer losses.
After Bitcoin’s emergence in 2009, Mt. Gox used to be the leading Bitcoin exchange. Most of the Bitcoin transactions were performed through its network. However, in 2013 Mt. Gox reported a DDoS cyberattack on its systems in which hackers were able to steal more than 9,000 Bitcoins.
The damages incurred were estimated to be close to $500 million. Authorities managed to arrest a few people for the hack but the incident transpired to become one of the most notorious Bitcoin crashes. The attack triggered wide panic in the industry and Bitcoin’s price decreased significantly.
BitGrail used to be one of the most unknown cryptocurrency exchanges once. It received massive popularity as it was one of the first exchanges to trade Nano (then Raiblocks), which was unavailable to trade on major exchanges.
Nano received great reviews from cryptocurrency analysts and traders in the late 2017, due to its lightning-fast and free transactions. Subsequently, it climbed up quickly into the top 20 cryptocurrencies. Many predicted it to have the potential to topple Bitcoin’s throne.
However, hackers realized that it was available on an exchange with weak security and thus infiltrated BitGrail’s systems. The attack happened in early February as BitGrail suspended its operations and started working on its security. 17 million Nano (worth $187 million) were estimated to be stolen.
Bitfinex is the latest cryptocurrency exchange to be attacked by a cyberattack. This was not the first instance when Bitfinex was involved in a cyberattack either. Earlier, Bitfinex was also in the headlines for an attack in 2016 when the attackers managed to eke out more than 100,000 Bitcoins from the exchange.
The recent attack came in early June as Bitfinex temporarily shut down its operations and began to investigate the hack as well as recover its systems. After a short period of time, the operations resumed.
Luckily, according to Bitfinex’s officials, this time the hackers were not able to cause any financial damage, and users’ funds and details remained unscathed. The only thing that was compromised was the trading features in the exchange which were fixed by Bitfinex’s team.
The growing number of cyberthreats in the cryptocurrency world means that exchanges, especially those located in the Middle East have to invest in their IT infrastructure and bolster their security through latest security measures.
For the traders, it is recommended to avoid storing cryptocurrencies on any cryptocurrency exchange. You never know when a reputable exchange becomes the headline of a cyberattack. Thus, choosing a safe cryptocurrency wallet like paper wallet is the best way to save your valuable investments.