Top Crypto Hacks
Cryptocurrencies and blockchain technology are gaining more recognition every day, and it seems that everyone wants to learn how to get started and get the most out of this space. But one must not forget that any technology has its downsides – given that blockchain space is still relatively new, the security of the applications is not the best it can be. When money is involved, many bad actors would like to exploit the protocol and run away with stolen funds without any regard to developers and users – today, we would like to highlight top crypto hacks that happened over the course of crypto history.
A lot has been said about the Mt. Gox hack and its effects on the crypto market. The exploit itself was quite simple – the company’s private key was hacked, and the thieves were able to skim thousands of dollars from customer accounts.
The space was shaken by this event, as Mt Gox was the biggest bitcoin exchange at the time. The incident is still being resolved to this day, even though more than 8 years have passed already.
The Ronin Network crypto hack is one of the largest exploits in the Web3 space with over half a billion dollars lost. The Ronin Network is a Layer 2 network that powers Axie Infinity, a popular video game that uses a blockchain. It provides a way for players to exchange ETH and other cryptocurrencies with each other.
The exploit stayed unnoticed for a week until one of the users discovered that he was unable to withdraw funds from the system. Again, the exploit itself turned out to be quite simple – attackers gained access to validators private keys and used them to withdraw money from the protocol.
The DAO hack had an impact similar to Mt Gox, leaving the space in turmoil. The DAO has received over $150 million in fundraising from over 11,000 investors, making it one of the biggest crowdfunding projects at the time. However, there were flaws in the DAO’s smart contracts, and before they were fixed, malicious actors were able to take advantage of them and siphon funds from The DAO.
The exploit left the Ethereum community in disarray as they debated how to respond to the exploit. Failure of the DAO would not only result in financial losses for investors but would also have serious consequences for the Ethereum network, as it was still new. After great debate, the community decided to do a hard fork of the network. The hard fork essentially rolled back the history of the Ethereum network to before The DAO assault and redistributed The DAO’s ETH to a separate smart contract, allowing investors to withdraw their assets. This was quite contentious; after all, blockchains are meant to be immutable and impervious to censorship.
Guarding Against Exploits
Numerous security practices are being developed to guard both individuals and protocols against exploits. Smart contract audits, and bug bounty programs to outsource and incentivise outsource parties with continuous security checks. Other options include using risk management tools and platforms to oversee project security and health to prevent loopholes and bugs from harming the project. There are various platforms in the DeFi security space like https://www.apostro.xyz/hacks and Gauntlet to help projects guard against economic exploits and overall code security.