Info-Graphs

The Wild West Of Crypto Hacks

Pundits and commentators have long worried about the security of decentralized cryptocurrencies. In fact, detractors often complain that investing in cryptocurrencies carries far too much downside for the average investor—even if the price goes up, you can still lose it all to hackers. We wanted to take a step back and analyze the history of crypto hacks. Please note that all USD estimated value is based on average market value at the time of the event.

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Crypto Hacks

We created our new graph by taking data from CryptoAware.org, which recently published a list of highly significant crypto hacks and scams. There’s no central record keeper for this sort of thing, so CryptoAware undoubtedly missed some. We combined a cluster graph representing the size of the hack on a timeline with the logo of the exchange or wallet provider that fell prey. This approach lets you easily see how often and to what extent the crypto-market has sustained attacks over the last several years.

A general trend is immediately obvious about our visualization: cryptoc hacks have generally become more common and more valuable over time. $10M+ hacks started happening with some regularity after the summer of 2016, right when the crypto-market started taking off. Prior to that time, there was exactly one hack over $10M, the infamous Mt. Gox hack in 2014. More on that in a minute. The second-most devastating hack happened very recently in a Tokyo exchange called Coincheck, for the somewhat obscure NEM coins. The only other two cryptocurrency hacks worth more than $100M were Parity’s Ether wallet hack ($160M) and BitGrail’a Nano hack from early this year ($170M). The latter is still causing lots of consternation within the cryptocurrency community. All things being equal, the average crypto-hack comes out to about $37M.

The critical thing to remember about our graph is that it represents the value of the cryptocurrency theft at the time it occurred. This creates a fair comparison because the value of cryptocurrencies changes literally every second of every day. But keep in mind what this really means: the Mt. Gox hack represented $450M in crypto-wealth as of early 2014, back when Bitcoin cost about $560. As of this writing on May 1, 2018, those same Bitcoins are worth just over $9,000, or a total of about $7,252,000,000. Think that’s incredible? Back in December of 2017, the stash would have been worth $15B+. That’s 10% of the entire Bitcoin market cap today and several times bigger than the biggest bank robberies ever.

This raises two important questions. First, what would somebody do with so much cryptocurrency? Obviously, the value of the currency would plunge as news broke of such a massive heist. Since there is no central governing authority, it is relatively easy to launder cryptocurrencies through different exchanges, which makes it possible to convert the coins into a country’s accepted currency. Second, can cryptocurrency exchanges and wallet providers come up with some sort of system to prevent hacks without government regulations? The Wild West nature of cryptocurrencies—price manipulations, flash crashes, hacks—all indicate that these platforms have to do a better job securing value. Suppose 10% of the entire Bitcoin market were to disappear tomorrow. What are the chances that central governments will outlaw exchanges then?

NameReported Loss (Crypto)Reported Loss (USD)Occured onSources
MyEtherWallet DNS hack215 ETH$152,000April 2018Forbes
Coinsecure Theft438 BTC$3,300,000April 2018Coindesk
South Korean Bitcoin Pyramid SchemeN/A$20,000,000April 2018Coindesk
GainBitcoin India Ponzi SchemeN/A$300,000,000April 2018Cointelegraph
Dantang coin PonziN/A$13,000,000April 2018CryptocurrencyNews
iFan/Pincoin Token ScamN/A$650,000,000April 2018VNExpress
BTC Global Ponzi ScamN/A$50,000,000Mar 2018Coindesk
Coinhoarder Phishing Scams (ongoing)N/A$50,000,000Feb 2018Cisco Research
Seele ICO Theft2,162 ETH$1,800,000Feb 2018Cointelegraph
Bee Token Phishing890 ETH$928,000Feb 2018Coindesk
BitGrail Theft17,000,000 NANO$170,000,000Feb 2018Bitcoinist
BlackWallet Theft670,000 XLM$400,000Jan 2018Coindesk
Coincheck500,000,000 NEM$400,000,000Jan 2018Bloomberg
Youbit korean exchange hackExact amount not reported. Lost 17% of assets?Dec 2017Bloomberg
NiceHash Hack4,700 BTC$62,000,000Dec 2017Reddit
Coindesk
Parity Wallet suicides513,774 ETH$160,000,000Nov 2017Paritytech
Tether Token Hack$30,950,010 USDT$30,000,000Nov 2017Coindesk
Enigma Project Scam1,500 ETH$500,000Aug 2017Coindesk
Parity wallet hack153,000 ETH$30,000,000July 2017Coindesk
Coindash ICO hack43,500 ETH$10,000,000July 2017Coindesk
Yabizon (Youbit)3,816 BTC$5,300,000April 2017Bitcoin
Asian-European Currency Ponzi ScamN/A$47,000,000Jan 2017Cointelegraph
OneCoin Pyramid Scheme (ongoing)N/A (actual scale unknown since the blockchain was never operational, actual loss could be much much more than estimated $50m)$50,000,000Dec 2016Bitsonline
Bitcurex2,300 BTC$1,500,000Oct 2016Bitcoin
Bitfinex120,000 BTC$77,000,000Aug 2016Arstechnica
DAO hack3,600,000 ETH$60,000,000June 2016Coindesk
Gatecoin250 BTC

185,000 ETH

$2,140,000May 2016Coindesk
ShapeShift469 BTC

5,800 ETH

1,900 LTC

$230,000April 2016Shapeshift

Coindesk

Bitcoin

Kipcoin3,000 BTC$690,000Feb 2015NewsBTC
Bter7,170 BTC$1,750,000Feb 2015Coindesk
Bitstamp19,000 BTC$5,200,000Jan 2015Arstechnica
796 Exchange1,000 BTC$230,000Jan 2015Cointelegraph
BitPay5,000 BTC$1,800,000Dec 2014Coindesk
Mintpal3,894 BTC$1,300,000Oct 2014Bitcoin
Cryptsy13,000 BTC

300,000 LTC

$9,500,000July 2014Coindesk
Poloniex97 BTC$64,000March 2014Coinsutra

Bitcointalk

CryptoRush Theft950 BTC

2,500 LTC

$570,000March 2014CCN
Flexcoin Theft896 BTC$600,000March 2014Coindesk
Mt Gox Hack850,000 BTC$450,000,000Feb 2014The Guardian
Picostocks Hack6,000 BTC$3,000,000Nov 2013Bitcoinexchangeguide
BIPS Hack1,295 BTC$650,000Nov 2013The Guardian
Inputs.io Hack4,100 BTC$1,200,000Oct 2013The Guardian
Vircurex1,454 BTC$160,000May 2013Coindesk

Bitcointalk

Bitmarket.eu
(related to bitcoinica hack in May 2012)
20,000 BTC$260,000Dec 2012Newsbtc
Bitfloor Theft24,000 BTC$250,000Sept 2012Arstechnica
BitFloor Hack24,000 BTC$250,000Sept 2012Coindesk
Bitcoin Savings & Trust265,000 BTC$2,800,000Aug 2012The Verge

Arstechnica

Bitcoinica 340,000 BTC$305,200July 2012Bitcointalk
Bitcoinica 218,000 BTC$91,000May 2012Bitcoin
Linode Hack46,700 BTC$228,000March 2012Arstechnica
Bitcoin711,000 BTC$50,000Oct 2011Bitcointalk
MyBitCoin Theft154,406 BTC$2,000,000Aug 2011Observer

Cryptocurrencies have had some struggles, but what does that mean for the future? We think of these hacks as growing pains:  any new industry will have companies that cut corners on security and pay a price. The free market usually takes care of these organizations—they go out of business. Additionally,  even though the size of these hacks is certainly eye-popping, keep in mind that the entire cryptocurrency market is worth about $423B right now. Yes, losing tens of millions to hackers is significant, but these problems won’t cause most people to panic about the security of the crypto-movement writ large.

See any hacks or scams we missed? Email us at press@howmuch.net and we’ll get researching!

Data: Table 1.1

Article by HowMuch