Crypto Hack: The Largest Crypto Exploits Timeline
Dec 20, 22 | Bakhtain Afzal
Cryptocurrency is a revolutionary concept in this modern time. Still, threats like security, hacking, and theft are the main user concerns. And, despite the bliss Internet is, these concerns are valid, as the Internet provides us with everything, but safety remains a major setback that cannot have various justifying explanations. Due to this, cryptocurrencies are backed by blockchain technology, which has numerous formidable advantages. In addition, Blockchain technology introduces the concept of Smart Contracts and Decentralized Applications (dApps).
Although blockchain development brings numerous benefits, crypto hacks have still happened. Yes, sounds very unexpected, but a crypto hack and smart contract hacks are the most common ones to occur so far. The list of crypto hacks is quite long, but we'll discuss that further in the blog.
This article will cover crypto exploit, bitcoin hack and crypto hacks timeline, etc. Let's dive in and find out about cryptocurrency hacks and the largest ones that have happened so far.
Has Any Cryptocurrency Been Hacked?
Speaking of a cryptocurrency hack, it did recently happen, making crypto enthusiasts agree to the possibility of a blockchain hack. Referencing the collapse of FTX, hundreds of millions of dollars were drained, and, to this date, that's the most significant financial disaster encountered.
Above $600 million were drained from FTX crypto wallets on a Friday in early November 2022, making it the most recent collapse. And right after this FTX collapse, the crypto exchange filed for bankruptcy.
Meanwhile, it asked all its users not to install any updates and delete FTX apps as they were malware. Hence, the FTX hack was the subsequent big collapse after the Grim Crypto Hack in December 2021.
How to Hack Blockchain?
A blockchain hack is possible, basically, any crypto exchange hack is possible through a crypto hack, specifically, when there's a weak security. And that can be performed through the following method, known as 51% attacks, a type of crypto hack. Here's how "51% attacks" work.
Replicate an Existing Blockchain Version: 51% Attacks
During a transaction process, miners can create another version of the Blockchain where transactions aren't reflected. Miners can show the replicated version of the Blockchain as the original version of it, and there's a possible chance of fraud there.
But, this blockchain hack method can be mainly used on a smaller scale. Since having firm control over larger transactions can be more complex, the possibility of errors is also higher.
What Are Smart Contract Hacks?
Smart contract hacks come under the heading of reentrancy hacks, a type of crypto hack. To explain that further, reentrancy attacks are blockchain bugs that let attackers or hackers steal Smart Contracts' balance.
It mainly occurs when Smart Contracts invite a distrusted external address. And the external address requested has the authority to call the original contract again before the first transaction completes. Through this, an attacker's malicious code can drain funds in the account before execution.
How Many Crypto Hacks in 2022 Occurred?
After getting an answer to your question about smart contract hacks, let's move toward the number of crypto hacks that happened in 2022. Statistically, 125 hacks occurred only in 2022, leading towards a clear doubt on investing in cryptocurrencies and if they're safe enough to be invested in.
Referencing stats collected by Chainanalysis, a blockchain analytics company, investors have already lost more than $3 billion in 2022. This crosses the crypto hacks that occurred in the previous year, 2021. Furthermore, in the same year, 2022, a crypto crash occurred, resulting in a loss of billions of dollars.
What Caused the 2022 Crypto Crash?
In the year 2022, there was a list of crypto hacks leading to high doubts before one stepped into the crypto investment zone. Since this was a clear chance of making passive income in the previous years, a few people considered this their primary source of income.
To oppose that, in 2022, there were several cryptocurrency hacks, for example, Wormhole Hack, Nomad Crypto Hack, etc. But, there were a few primary reasons for this 2022 crypto crash, which resulted to be the top crypto exploit.
Here are the four major factors leading to the 2022 crypto crash:
Speculation of Crypto
While there were other crypto crashes, 2022 was the year of significant crypto crashes. While the crash itself was a major loss in the crypto market, the speculation and manipulation of news made this, and that intensified the ratio.
After knowing about on and off crypto crashes, for example, Qubit hack, Beanstalk hack, etc. the major plunge for the market was that the investors simply sold off their assets. And this trade of assets was valid as nobody wanted to face significant losses in their investments. Plus, this is where the concept of FUD (Fear, Uncertainty, and Doubt) comes into play.
This is significantly the highest contributor to the 2022 crypto crash, and the same goes for stock markets. The interest rates have been rising, and that leads to a definite crash in the future. Another contributor to his crash is the COVID-19 pandemic, as it increased the prices of general supply items. To combat this, the US Federal Reserve raised interest rates to bring down inflation. US interest rates play a critical role in the supply and demand of crypto prices.
Bitcoin Crash 2022
Although the year wasn't in favor of the crypto market, Bitcoin also plunged and listed as a top crypto exploit. This then led to around 80-90% down the rate of Bitcoin as well. This doesn't only go for Bitcoin; it went the same for Ethereum. It faced a significant fall within the same year since the demand for crypto was getting lesser.
Terra Luna Crash
The LUNA coin was launched in 2019 and quickly became one of the most successful coins in DeFi. Based on market capitalization, it ranked as the 7th most demanded cryptocurrency. Impressive enough, but it had a significant fall as well.
In May 2022, LUNA fell by 96%, and it even went as low as $0.10 within the first two weeks of May and went down to almost nothing, i.e., $0.00001675.
Being one of the largest cryptocurrencies, it took down many other significant names with itself, resulting in a primary reason for the crypto crash in 2022.
Crypto Hacks Timeline
Hacking within cryptocurrencies, which once promised to be a safe space for digital assets, is on a definite rise. Mainly due to the reasons mentioned above, it's also the equipment of knowledge about crypto, Blockchain, etc.
To highlight a few, here are the largest crypto hacks that happened recently:
Binance is a leading name among the top crypto exchanges. But, it fell drastically in October 2022 with a loss of $570 million. And Binance crypto hack was one of the most highlighted high-profile crypto hack happened in the crypto market. It was made possible by performing a hack in the BSC Token Hub, a cross-chain bridge.
In this cross chain hack, the hackers exploited the cross-chain bridge and created new BNB tokens; they withdrew 2 million BNB tokens. As a result of this crypto hack, blockchain security started getting higher emphasis, and security bugs in smart contract code started to improve.
Wormhole mainly functioned as an Ethereum and a Solana bridge that was brought down to losses worth $325 million on the 2nd Feb 2022. A Wormhole Hack was performed by exploiting the Smart Contracts for cashing and minting the wrapped Ether with zero collateral deposits.
The Qubit hack gained massive attention and managed to garner headlines in the mid of January 2022, as the losses accounted for almost $80 million. This, again, was due to the manipulation of Smart Contracts similar to the Wormhole attack in the same year. The hackers involved in the Qubit hack could mint out the wrapped Ether tokens with no collateral deposits.
Nomad Hack Explained
Under the heading of the Nomad Hack explained, here's another massive crypto crash, which accounted for approximately $190 million. The cross-chain protocol, which the platform was based on, drained out cryptocurrencies within a few hours as a result to the cross chain hack. And being exposed to several vulnerabilities, hackers took advantage of it.
It started with a single hacker, and different hackers joined the suit. As a response to the hack, it comes with a new identity of "security-first cross-chain messaging protocol." And, that’s Nomad Hack explained briefly above.
The Beanstalk hack clearly represents how flash loans are a definite vulnerability for the DeFi platforms. The hackers borrowed a flash loan of $1 billion. And the hacker proposed this loan for proposing funds to Ukraine and got cleared out for that. Plus, in the Beanstalk hack, the hacker even managed to invite users who contributed to it.
He managed to get a 67% controlling stake, and once he had the majority stake, the funds were transferred to the crypto wallets with no loan payment.
Grim Crypto Hack
The Grim Crypto Hack, occurred in 2021 for $30 million worth of tokens and was referred to as an advanced crypto hack attack. Later, it was confirmed that the exploit was found in vaults, and even the funds deposited during that time were considered a risk.
The IRA Financial Hack - Gemini and IRA Lawsuit
IRA financial hack has two parties involved, IRA and Gemini. IRA, a financial trust, alleges Gemini for a $36 million lawsuit where it asserts that Gemini was unsuccessful in freezing the accounts of crypto asset holders while a crypto exchange hack was in process.
It alleges that Gemini failed to respond on time to a crypto hack, where cyber hackers continued to siphon funds for hours. And Gemini only took account of the incident once IRA informed them. So far, the IRA financial hack lawsuit is underway, and there has been no final verdict on this lawsuit.
What Is the Biggest Crypto Hack?
After reading about the IRA financial hack, let’s read about the biggest crypto hack. The biggest crypto hack was of Binance, which touched $570 million. And it gets its name in the high-profile attacks in the history of cryptocurrency. Further description of the Binance crypto hack is mentioned above, under the heading of the crypto hacks timeline 2022.
Is It Possible to Cheat in Blockchain?
Yes, it is possible to cheat in Blockchain, referring to the traditional sense of it being hacked. This can be possible by introducing malicious code or hacking the network by breaching a weak security protocol that already exists. Other than that, a 51% attack, a crypto hack method can also be used. We've already mentioned that under the heading "is it possible to hack blockchain."
Trust Wallet Hacker - When Trust Wallets Were Attacked
A trust wallet is an Ethereum wallet where one can store NFTs, and hacking has remained possible for a trust wallet hacker. The incidents associated with a trust wallet hacker relate to phishing emails that users can open simply out of habit or curiosity.
The email typically comes with the subject line of wallet verification, which definitely sparks the urge to open an unidentified email. And opening them is a clear green flag for a trust wallet hacker to play its role.
Is BTC Hack Possible?
While blockchain hacking is a possibility, so far, bitcoin has never been hacked. But yes, bitcoin hack is possible because a crypto hack is clearly possible and year 2022 stands in evidence to that.
Although there are minor bugs that appear from time to time, it could be better. Plus, there are theoretical security concerns that can be a threat to Bitcoin today or somewhere in the future.
How Was Ronin Hacked?
For the cross chain hack to begin, the Lazarus Group needed to steal five of the nine private keys used by transaction validators on the cross-chain bridge of the Ronin Network. With this vote, they authorized two withdrawals totaling $25.5 million in coins and 173,600 ETH (USDC).
As soon as they began the money laundering process, Chainalysis started tracking the money. Over 12,000 unique crypto addresses have been used for money laundering, demonstrating the hackers' extensive laundering skills. To sum this up, this was another crypto exchange hack that happens to have its name in the top crypto hacks.
Can Crypto Be Stolen From Binance?
Yes, crypto can be stolen from Binance and Binance crypto hack is a clear representation of that.
Binance, the world's largest cryptocurrency exchange, later mentioned that it had been the victim of stealing assets from the Binance Smart Chain network. Also, binance crypto hack remains to be the latest in a string of hacks on the cross-chain bridges.
How Did the Poly Network Hack Happen?
On 10th Aug, Poly Network stated that an unknown attacker breached a smart network contract, through a crypto hack, moving around $610 million (mainly in Ether, Binance Coin, and USDC) to external wallet addresses.
Can Crypto Wallets Be Hacked?
Despite market instability, crypto wallets can be hacked, and the popularity of crypto wallets has skyrocketed as new cryptocurrencies, NFTs, and tokens are introduced. For example, a trust wallet hacker hacked trust wallet resulting in a great loss.
Attacks and fraud on cryptocurrency wallet apps have increased as well.
The summary of the most significant attacks in recent memory for crypto fans portrays a bleak image. Here's a key takeaway that sums up our article in a few pointers:
- Even Blockchain's cryptographic security cannot prevent cryptocurrency theft. You must have taken note of the various root causes of major cryptocurrency hacks in addition to the ever-changing complexity.
- The specifics of the breaches also indicate how protocols could bounce back from any hypothetical hacks simultaneously.
- The list of cryptocurrency hacks highlights the necessity of understanding the best practices for blockchain security, which is the most crucial thing.
While the topic of cryptocurrencies, cryptocurrency hacks, bitcoin hack and blockchain technology brings doubts about crypto investments. But, to sum it up, 2022 wasn't the year for crypto investments, and even the investors regretted the part or they sold off their assets.
But, blockchain technology remains to thrive, and top custom software development companies are bringing forward innovative blockchain development solutions for businesses.
On the other hand, due to various top software development companies worldwide, finding the best one for your business is challenging. To get that easier, head towards Distinguished, a B2B service-providing platform, and find the best software development partner for your next development project.
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