Extensive Crypto Theft: Over $30 Billion Stolen from the Cryptocurrency Ecosystem since 2012, as Per Recent Report
A report released on July 7 by SlowMist has unveiled a concerning trend within the crypto world, revealing that a staggering sum of over $30 billion in cryptocurrencies has been hacked over the span of 1,101 documented incidents, starting from 2012 and continuing to the present.
The blockchain security firm has identified the top five most common types of hacks that have occurred within this timeframe. These include smart contract vulnerabilities, rug pulls, flash loan attacks, scams, and private key leaks. The cumulative losses from these incidents amount to approximately 2.5% of the current overall market capitalization of cryptocurrencies.
Further analysis of the documented incidents reveals a breakdown of specific hacks within various crypto ecosystems. Out of the total number of incidents, 118 hacks were aimed at exchanges, while 217 were targeted at the Ethereum ecosystem. Additionally, there were 162 hacks within the BNB Smart Chain ecosystem, 119 within the EOS ecosystem, and 85 related to nonfungible tokens (NFTs). Of particular note, exchange hacks accounted for the largest losses, surpassing $10 billion over the past decade.
Notably, the report also highlights the frequency of high-value hack events, with losses exceeding $1 billion. These events experienced a peak during the early 2010s and from 2019 to 2021. However, it is worth mentioning that security incidents have been relatively subdued since 2022, aligning with findings from other reports on the subject.
Early Bitcoin Era Marred by Major Hacks: Mt. Gox and Bitfinex Incidents Stand Out
During the nascent stages of Bitcoin (BTC), the cryptocurrency experienced significant setbacks with two notable attacks: the 2014 Mt. Gox hack and the 2016 Bitfinex hack. These incidents left a lasting impact on the crypto community and highlighted the vulnerabilities present in the emerging ecosystem.
Mt. Gox, once the largest Bitcoin exchange worldwide, made headlines in 2014 when it filed for bankruptcy after uncovering a massive theft. It was revealed that a staggering 850,000 BTC belonging to its customers (equivalent to $25.2 billion at the time) had been discreetly siphoned off over several years through cunning hacks. Since then, the exchange has managed to recover 200,000 BTC (worth approximately $6.1 billion) and is currently in the process of redistributing these funds to its creditors.
Similarly, in 2016, Bitfinex encountered a severe security breach, resulting in the loss of 119,576 BTC, valued at around $70 million at the time ($3.7 billion at present). However, on February 8, 2022, a breakthrough occurred when special agents affiliated with the United States Department of Justice successfully recovered 94,000 of the stolen BTC.
These high-profile incidents serve as stark reminders of the challenges faced by early cryptocurrency exchanges. They not only highlighted the need for robust security measures but also emphasized the importance of trust and regulatory frameworks within the crypto industry. While significant progress has been made in addressing these issues, the impact of these hacks continues to reverberate through the collective memory of the crypto community.