When people put their money in banks that is typical because they had just few other alternatives. Sure, possibly you can avoid the banks and save your money through government bonds or hide it beneath your mattress. However, due to the absence of insurance, security and convenient transaction had discouraged people from using these channels.
To be honest, up till now, we had limited alternatives. The popularity of Cryptocurrencies has empowered to be their own bank. You only need software or sometimes just a piece of paper is sufficient to store any amount of more safely regardless of the amount. The balances cannot be audited; they are hard to steal and not possible to transfer. So how come people who use Cryptocurrencies rather keep their money in exchanges, that have all the disadvantages of a bank (you ought to believe in them) without any of the advantages (the exchanges are neither backed by the government nor insured by the government)?
In the event that you are leaving your money with a Cryptocurrency exchange, you should trust the exchange, its executive as well as its security policies that keep hackers from your property.
Any theft that involves a Cryptocurrency is big news in the public arena. First, the amount that could be stolen is massive as against that of the conventional banks. Secondly, with the novelty of cryptocurrency, it is currently being scrutinized by the public, therefore any hack is in the news in a bit. More importantly, money stolen cannot be traced back.
With all that said, let us explore some of the largest Cryptocurrency robberies of all time.
The japans based Coincheck; a crypto exchange was robbed of 500 million NEM (or approximately 532 million USD) back in January 2018. The problem was due to the wallet of the currency, NEM not being properly set up.
Initially blamed on state-backed operatives based in North Korea, but later pieces of evidence show that it originated from Russia. Malware-infected laptops of the employees were exploited by hackers to gain access.
However, surprisingly, Coincheck fully reimbursed its customers with the profits it had made. But consequently, it forced the Japanese financial regulator to further restrict the exchange system of the digital currency.
Till date, the Coincheck robbery was the biggest of all time due to the prevailing exchange amount at the time.
2). Mt. Gox
The Mt. Gox was a shocker among the Cryptocurrency sphere. With the number of people involved unknown, there was a glitch in the system which made it possible for users to take out more Bitcoin that they own.
At the time, Mt. Gox was an important exchange controlling about 90% 0f all Cryptocurrency trades. It is known that the company lost about 850,000 Bitcoin equivalents of roughly 450 million at that time.
Initially set up by Jed McCaleb, Mt. Gox was used as a portal for trading tokens that were obtain from games. It was subsequently upgraded to include Bitcoin trading after; McCaleb had seen the increasing popularity of Bitcoin and he wanted to be of help to Bitcoin traders. But, it failed to attain the security needed for safe operation of an exchange. As the number of Bitcoins been traded increased, hackers were able to notice a loophole in the company’s blockchain and took advantage of the glitch. Roughly, about 200,000 stolen Bitcoin have been recovered, however, pending claims and lawsuits have stopped the rightful owners from getting back their Bitcoins.
The Bitfinex lost about a total of 120,000 (72 million USD) in a single attack back in 2016. The coins were stolen from the wallet of the company. Details as to how the hackers were able to compromise the company’s security protocols and make off with the money are still sketchy.
With two Israelis arrested with a link to the attacks, Bitfinex tried to compensate its users by the use of a token. 95% of which had been bought back by the company through profits.
Occupying the fourth position on this list is Nice Hash. The company was robbed of 4,700 Bitcoin (or roughly 64 million USD) around December 2017. The Slovenian-based mining marketplace was basically a place where unattached miners could rent out mining powers to users who don’t have. The company ran hot and cold wallets that rewarded members with Bitcoins for their mining efforts. It was these wallets that were hacked. However, despite the enormous amount stolen, Nicehash has been able to pay back more than 75% of the amount lost.
Zaif lost various Cryptocurrency types such as Bitcoin, Bitcoin Cash, as well as Monacoin. It lost a total of about 62 million USD back in September 2018. It took the company about three days to detect the theft from its wallet, however, it immediately stated that funds from the company would be later used to reimburse all affected customers.
In May 2019, hackers robbed Binance of 7,000 Bitcoin. The total equivalent stolen from the popular crypto exchange was at the time of about 40 million USD. The exchange utilized a dedicated insurance fund as a means of compensating the affected users. This caused withdrawals to be stopped for some days as the company tried to understand what led to such a loss. At the time, Zhao Changpeng, the CEO of Binance had written a lengthy blog post explaining the attack and had interacted with users on Twitter to address their concerns, staving off anxieties due to the aftermath of the crises which affected Bitfinex and Mt.Gox.
You should not store your Bitcoins with an exchange
Dissimilar to conventional banks, there is no reason for holders of Cryptocurrency to store their Bitcoins with an exchange. Rather, they have them stored in a wallet based on their phone or a device that is solely dedicated to their purpose. While Bitcoin will still be in existence in five or ten year’s time, but your preferred exchange for Bitcoin might not be around.
You should consider using a VPN powered device
A virtual power network (VPN) allows you to access the internet without having to worry about security concerns or the activities of hackers. The best VPN comes with numerous as well as strict security features that keep all your online financial transactions safe.