Cryptocurrency has grown in a tremendous way in the past few years. At the same time, hackers have robbed Bitcoin investors billions of dollars. The main reason why hackers have been having a field day is partly due to blockchains’ relative anonymity. Even though authorities and private investigators are starting to identify the hackers and the thieves, cryptocurrency market remains one of the most vulnerable markets for investors. Here are the most notorious Bitcoin wallet hacks that have taken place over the years;
Mt. Gox
Mark Karpeles, a cryptocurrency enthusiast bought Mt. Gox from programmer Jed McCaleb in 2011. He was able to revamp the site and it soon became the most prominent and popular Bitcoin exchange platform in the world. It was handling more than 70% of all crypto transactions in the world. Just months after being bought, from Jed, Mt. Gox was hacked and 2,609 BTC was stolen. The servers of the exchange went offline for several days before trading was resumed.
In Feb 2014, hackers came trooping again and this time they were thorough. They stole 750,000 BTC which at that time was equivalent to $350 million. Assuming the hacker carefully hid these BTCs and sold them today at a price of $7,000 s/he would have gotten a whopping $5.25 billion. This hack was big enough to sink Mt. Gox and with it millions of people’s hard earned cash.
Bitfinex
Bitfinex is a cryptocurrency exchange which runs on a multi-signature wallet architecture. In August 2016, a hacker sniffed a security flaw in the complex multisig wallet of Bitfinex and BitGo and exploited it. 120,000 BTC which were worth $72 million was stolen. Today, the Bitcoins would be worth $840 million. This was the second most catastrophic hack in the history of Bitcoin.
In order to survive, Bitfinex resulted to issuing BFX tokens to the victims. These tokens were redeemable over a period of time using USD. Bitfinex still offers trading services. Currently, it is one of the biggest processors of BTC/USD exchanges in the world.
BitFloor
BitFloor was hacked due to a technical lapse and human error. In 2012, a hacker managed to exploit a flaw in the servers of BitFloor and stole 24,000 BTC. At the time the Bitcoins stolen were worth $250,000. According to reports, the hacker found a way to open the accounts of BitFloor customers while using backup keys. The hackers transferred the funds to an anonymous wallet.
It is said a human error contributed to the hack because the firm stored all its Bitcoin funds in an online wallet instead of offline. Even though the firm was forced to close down because of some regulatory issues, the victims of the hack were nonetheless refunded.
BitStamp
After Mt. Gox was hacked in 2011, BitStamp came into the market as a better and safer alternative with iOS and Android wallets. The Slovenian firm remained a strong exchange until January 2015. According to BitStamp, about 19,000 BTC was stolen by a hacker. The worth of the Bitcoin coins then was $5 million. Over time, the firm has managed to acquire BitGo multisig wallets and also gain back the trust of customers.
