Security lessons and insights from the greatest crypto heists of all time

The cryptocurrency industry has played host to numerous high-profile hacks, resulting in the loss of millions of dollars worth of digital assets from exchanges and wallets.

This article delves into some of the most notable hacks in crypto history. We explore the valuable lessons learned from the events to improve security measures and protect user assets.

The Ronin Network Heist (2022)

Ronin Network — the underlying blockchain infrastructure for the widely popular play-to-earn (P2E) game Axie Infinity — endured a significant security breach in 2022.

The hackers exploited a vulnerability in Ronin Network’s multi-signature wallet system — accessing and withdrawing over $620 million in crypto assets.

Lesson learned:

• Continuous updating of security measures and conducting regular audits are vital to ensure a network keeps up with the ever-evolving industry landscape.

The Poly Network Heist (2021)

Poly Network — a cross-chain protocol designed for decentralized finance (DeFi) — fell prey to one of the biggest crypto heists in history in August 2021.

The hacker exploited a flaw in Poly Network’s smart contract system, allowing the cybercriminal to steal over $610 million in various cryptocurrencies.

Interestingly, the hacker later returned most of the stolen funds — citing that they intended to expose the platform’s security vulnerabilities.

Lesson learned:

• Ensure comprehensive smart contract audits and constant monitoring to secure the safety of DeFi platforms and users.

The Binance Heist (2019)

Binance — one of the world’s leading cryptocurrency exchanges — faced a massive security breach in May 2019.

Hackers were able to withdraw approximately 7000 Bitcoin (BTC) — valued at $40 million back then. The attackers employed phishing, viruses, and other methods to access user data and bypass Binance’s security checks.

Lesson learned:

• Implementing more robust anti-phishing and anti-virus security measures is crucial, and user education plays a critical role in the deterrence of cyberattacks to protect digital assets.

The Coincheck Heist (2018)

Coincheck — the Japan-based cryptocurrency exchange — fell victim to one of the most extensive crypto heists ever, losing $530 million worth of NEM (XEM) tokens from its hot wallet in January 2018.

Coincheck stored a large portion of its XEM holdings in a ‘hot’ wallet connected online — rather than adopting a more secure cold storage method with funds stored offline; behind the safety of a pin.

Lesson learned:

• The critical role of secure asset storage and the use of cold wallets to store large holdings to minimize the risk of asset theft.

The Mt. Gox Hack (2014)

Once the world’s largest Bitcoin exchange, the Mt. Gox hack stands as the largest BTC heist in crypto history — losing roughly 850,000 BTC valued at approximately $450 million at the time in 2014.

At press time, the 850,000 BTC stolen would be worth $23.4 billion.

The hack was attributed to a mixture of inadequate security practices, a lack of audits, and insider involvement. Following the Mt. Gox collapse, exchanges began to implement far more stringent security measures — such as multi-signature wallets and consistent, regular external audits.

Adding insult to injury, the hack was not performed in 2014 but instead saw funds siphoned away as early as 2011 — until discovered in 2014.

Lesson learned:

• Don’t leave your BTC at Mt. Gox (unless you’re the insider).
• Serious note: Like other heists, more robust security measures and consistent audits are essential for maintaining the integrity of exchanges and protecting user assets.

CertiK: How to protect against large-scale attacks

When ask for comment on how to secure blockchain infrastructure, CertiK told CryptoSlate:

“Bridges, decentralized exchanges (DEXs), and centralized exchanges can take various measures to protect themselves from large-scale attacks.”

CertiK suggested steps for platforms to take to “enhance their security,” including regular audits, DDoS protection, secure storage of funds, bug bounty programs, incident response planning, and engaging the community.

On the topic of the Ronin hack, CertiK said:

“The Ronin bridge hack, one of crypto’s largest ever, was likely carried out by a North Korean government-affiliated entity. There are professionals out there who can and do exploit any vulnerabilities they come across.”

Immunefi: ‘Bulletproof code’

Tech Lead of the triaging team at Immunefi, Adrian Hetman, told CryptoSlate:

“In order to defend against malicious attacks from blackhat hackers, you need to have bulletproof code.”

Immunefi said that the only way to achieve this level of security is “by conducting code audits and engaging as many people as possible to constantly review and test your code for bugs via bug bounty programs, code audits, and working with solo security researchers.”

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