$8.5 billion lost due to blockchain-related hacks

$8.5 billion lost due to blockchain-related hacks
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Published: 15 December 2019 - 12:48 p.m.
The blockchain space remains an unsafe place for investors and companies due to a large number of hacks that affected the space. According to data gathered by PreciseSecurity.com, the total amount of money lost to hackers has reached $8.5 billion. Despite the increased regulations and controls, hacks continue to affect the industry.

Hackers affect the blockchain market
In the last years, hackers decided to focus on attacking crypto and blockchain-related companies and platforms. In general, these firms handle large amounts of funds from users, and they have to protect their customers. Nonetheless, hackers are very active, and they are always implementing new strategies to be able to break into these systems.

In the last month, there have been several attacks on crypto and blockchain networks and platforms. For example, on November 21st, hackers launched a trade rollback attack on TRON’s Dice decentralised application (dApp) that generated a loss for the platform of 18,808 TRX.

Meanwhile, the cryptocurrency exchange Upbit was affected by a hack in which they lost 342,000 ETH worth $50 million. However, the method used by the attackers is still unknown. Other hacks include the one experienced by Tron Lounge in which attackers were able to get 54,653 TRX and the 51 per cent attack suffered by Vertcoin (VTC), losing 0.44 BTC.

Most of the attacks took place on the EOS network. 114 hack events affected EOS decentralised applications, which can be gambling, decentralised exchanges, and other solutions. Exchanges are the second most affected platforms. 59 exchange platforms have lost part of their funds due to their weak security measures and controls on the funds they handle.

Exchanges must always have some funds located in hot wallets that are used to power the exchange and help traders have cryptocurrencies to handle. In general, the funds located in hot wallets are always reduced to the minimum level as possible to avoid being targeted by hackers. In general, the way malicious parties have to access these funds is by phishing scams to exchange employees or by breaking into the systems and trying to exploit a vulnerability.

The cryptocurrency exchange Coincheck was hacked by $500 million in early 2018, losing a large number of NEM (XEM) coins. Although Coincheck is now operating again, the platform is handled by new owners. Meanwhile, the most popular trading platform in 2014, Mt. Gox lost around 850,000 BTC to hackers. This was the largest hack ever registered in Bitcoin’s history.

TRON dApps have also been affected 19 times due to different hacks, followed by blockchain networks with 16 hack events and wallet platforms with 14 hack events. Despite the new regulations that are being placed by governments and regulatory agencies around the world, it is necessary to improve the security of crypto and blockchain-related systems.

Larger and traditional investors would not feel comfortable placing their funds in an industry that is attacked every single month and where vulnerabilities are very common. Data shows there is still a place to improve blockchain and crypto security systems in the sector.

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