Hackers Stole $1.2 Billion in Cryptocurrency in Less Than a Decade

In less than ten years, hackers have stolen around $1.2 billion in cryptocurrencies such as Bitcoin and Ethereum, according to Bloomberg, citing Lex Sokolin, head of the fintech division at research firm Autonomous Research LLP.

“It seems that hacking cryptocurrencies has become an entire industry with an annual revenue of $200 million,” Sokolin noted. According to him, hackers have compromised more than 14% of the total amount of Bitcoin and Ethereum in circulation.

Susan Eustis, CEO of WinterGreen Research, stated that hacks involving cryptocurrencies like Bitcoin have cost companies and governments about $11.3 billion due to lost potential tax revenue from cryptocurrency sales and illegal transactions. These losses may increase as more investors try to enter the cryptocurrency market without considering potential risks and proper security measures.

Cryptocurrency experts say that many users mistakenly believe blockchain systems are secure because their records are shared and difficult to alter. However, in reality, they are no safer than any other software. This is largely due to the newness of the technology. Currently, there are thousands of cryptocurrencies, each with its own vulnerabilities. So, while hacking a blockchain may be harder than hacking a retailer’s database, the potential profit for attackers is also much greater, specialists explained.

According to a report by researchers from the Institute of Electrical and Electronics Engineers (IEEE), hackers can use the same bitcoins twice, even though the system has mechanisms to prevent such situations. By carrying out a so-called “balance attack,” hackers can delay network communications between groups of miners whose computers verify transactions in the chain.

“We have no evidence that such attacks have already been carried out with Bitcoin. However, we believe that some of Bitcoin’s key characteristics make these attacks possible and potentially dangerous,” the researchers noted.

Attacks on cryptocurrency exchanges have become quite common. In December 2017 alone, major Hong Kong-based exchange Bitfinex and South Korean exchange Youbit fell victim to cyberattacks. The latter announced its closure and began bankruptcy proceedings after suffering significant financial losses from several hacks.