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Most Significant Hacks of 2019 — New Record of Twelve in One Year



Most Significant Hacks of 2019 — New Record of Twelve in One Year

Twelve major cryptocurrency exchange hacks occurred in 2019. Of these, 11 hacks resulted in the theft of cryptocurrency while one only involved stolen customer data. In total, $292,665,886 worth of cryptocurrency and 510,000 user logins were stolen from crypto exchanges in 2019. Cryptocurrency exchanges experienced more hacks last year than in 2018, when only nine cryptocurrency exchanges fell victim to security breaches.

As time goes on, you might think that cryptocurrency exchanges would become more secure. The reality, however, is that more hacks on cryptocurrency exchange are taking place year after year. In general, crypto exchanges remain unregulated, and it’s still unclear which regulatory agency has jurisdiction over the crypto markets.  

Although there are no established rules regarding how cryptocurrency exchanges should safeguard customer funds, there are crypto-friendly countries and states. Canada, Malta and the American state of Wyoming have created crypto-friendly legislation that makes it easier for businesses to operate and gives them guidelines regarding security practices.

Sadly, not all countries have created guidelines or laws that help crypto businesses operate and reduce the risk for consumers. The way cryptocurrency exchanges store and protect their customer’s wealth differs from exchange to exchange; unfortunately, this makes cryptocurrency exchanges a hotbed for hacks that result in the theft of cryptocurrency or customer data.  Let’s take a closer look at the cryptocurrency exchange hacks of 2019 and how much cryptocurrency, fiat and customer data was stolen in each incident.

Related: Crypto Exchange Hacks in Review

Hacks on crypto exchanges in 2019

1. Cryptopia

Date: Jan. 14, 2019

Headquarters: New Zealand

Amount stolen: $16,002,108

Just two weeks into the year, the first hack on a cryptocurrency exchange took place. New Zealand-based Cryptopia was hacked for over $16 million worth of cryptocurrency at the time. Social media users started their own investigation, according to which, over 20 different cryptocurrencies were taken from the exchange’s hot wallet.

2. LocalBitcoins

Date: Jan. 26, 2019

Headquarters: Finland

Amount stolen: $27,000

A few weeks later, the popular over-the-counter Bitcoin exchange LocalBitcoins was the victim of a security breach. Attackers were able to replace the official link to the exchange’s forum with a fraudulent link that led users to a fake page that resembled the discussion board but collected the information of the users who attempted to log in.

The attackers used the information they obtained to steal 7.9 Bitcoin — worth $27,000 at the time — from at least six user accounts.

3. Coinmama 

Date: Feb. 15, 2019

Headquarters: Israel

Amount stolen: 450,000 account usernames and passwords

In just the second month of the year, Israel-based cryptocurrency broker Coinmama learned that its database had been breached. As a result, an estimated 450,000 user account logins and passwords had been compromised and posted on a darknet registry.

4. DragonEx

Date: March 24, 2019

Headquarters: Singapore

Amount stolen: $7.09 million 

On March 24, Singapore-based exchange DragonEx posted in its official Telegram group that it had experienced a hacking attack, and as a result, a portion of the users’ and the platform’s crypto assets had been stolen. Days later, DragonEx released an announcement on its website, saying: “On March 24th, DragonEx suffered APT attack, which is the greatest challenge since DragonEx was first launched in the year of 2017. 7.09 million USDT assets are stolen.”

5. CoinBene

Date: March 25, 2019

Headquarters: Singapore

Amount stolen: $105 million

Just two days after the DragonEx hack, another cryptocurrency exchange in Singapore, CoinBene, was hacked. Many CoinBene users became suspicious of a hack when the CoinBene site unexpectedly went down for maintenance. Individuals who were tracking the CoinBene hot wallet noticed that a whopping $105 million worth of crypto assets had been removed. Even though all of the evidence is on the blockchain, CoinBene continues to deny that it was ever hacked.

Related: Over $100 Million Missing: CoinBene Claims Maintenance, a Month of Questions Point Toward a Hack

6. Bithumb

Date: March 30, 2019

Headquarters: South Korea

Amount stolen: $18.7 million

March was a bad month for cryptocurrency exchanges. Just a few days after the CoinBene hack, Bithumb was hacked for an estimated $18.7 million — $12.5 million in EOS tokens and $6.2 million in XRP. Unlike other exchange hacks, Bithumb believed that the theft was an inside job committed by a former Bithumb employee who had access to its hot wallets.

Related: North Korea and Crypto: Is the Regime Responsible for Major Hacks?

7. Binance

Date: May 7, 2019

Headquarters: Malta

Amount stolen: $40 million

On May 7, Binance — the world’s biggest cryptocurrency exchange — experienced a security breach. As a result, 7,000 BTC, equivalent to $40 million at the time, was stolen. In addition, Binance said that hackers were able to obtain user API keys, two-factor authentication codes and possibly more user information.

Later, on Aug. 7, it was revealed that hackers were in possession of over 60,000 pieces of Know Your Customer data from the Binance exchange. An individual going by the name “Bnatov Platon” said he or she hacked the individuals that hacked Binance back in May and discovered that the original hackers had also gained access to 60,000 pieces of customer KYC data, including the photo IDs of 10,000 Binance users. 

Related: Binance KYC Breach — Did It Happen, and If So, Who’s to Blame?

8. GateHub

Date:  June 1, 2019 

Headquarters: United Kingdom

Amount stolen: $10 million

In June, GateHub made an announcement, saying 100 of its users’ XRP wallets had been compromised. A GateHub community member took a deep dive into the hack and discovered that by June 5, 23,200,000 XRP had been stolen from 80–90 of these wallets — the equivalent to about $10 million at the time. 

9. Bitrue

Date: June 26, 2019

Headquarters: Singapore

Amount stolen: $4.23 million

At the end of June, Bitrue was hacked, and roughly $4.23 million was stolen. Hackers learned of a vulnerability in Bitrue’s security that gave them access to about 90 user accounts. Afterward, hackers used what they learned from their 90-account takeover to successful compromise Bitrue’s hot wallet. As a result, 9.3 million XRP and 2.5 million ADA were stolen.

10. BITPoint

Date: July 11, 2019

Headquarters: Japan

Amount stolen: $32 million

On July 11, Japan-based cryptocurrency exchange BITPoint was alerted of an irregular outflow of XRP from its hot wallet. Several hours later, BITPoint became aware that Bitcoin, XRP, Ether, Bitcoin Cash and Litcoin had been moved from the exchange’s hot wallet without authorization. In total, $32 million worth of cryptocurrency was moved out of BITPoint’s hot wallet — $23 million of which belonged to BITPoint users.

Related: BITPoint Hack Shows That Regulators’ Scrutiny Does Not Equal Safety

11. VinDAX

Date: Nov. 5, 2019

Headquarters: Vietnam

Amount stolen: $500,000

For the most part, the VinDAX hack is a mystery. VinDAX is a small cryptocurrency exchange based in Vietnam that primarily hosts token offerings for unheard of companies. Information regarding this security breach is scarce. However, The Block took a deep dive into this mysterious hack and learned from the VinDAX support staff that roughly 23 cryptocurrencies — worth $500,000 in total — had been removed from its hot wallet without authorization.

12. Upbit

Date: Nov. 27, 2019

Headquarters:  South Korea

Amount stolen: $49,116,778.00

And finally, the last hack of the decade: Upbit. Upbit is a South Korea based cryptocurrency exchange that was hacked for 342,000 ETH — equivalent to $49,116,778 at the time — on Nov. 27. All that is really known is that hackers were able to gain access to Upbit’s hot wallet and move Ether without authorization. However, Upbit released a statement shortly afterward telling users that it would be covering all of the losses with the exchange’s assets.

Related: Upbit Promises Swift Reimbursement, Theories Over Missing Funds Swell

The damage

In total, $292,665,886 worth of cryptocurrency was stolen from 11 cryptocurrency exchanges and 510,000 pieces of user information were taken from the database of one exchange — a total of 12 cryptocurrency exchanges experienced security breaches.

So, what does this all mean? It means that cryptocurrency exchanges have to do better in terms of industry standards and security practices. Sadly, we did not see enough legislation and security improvement in 2019, and we experienced even more cryptocurrency exchange hacks than in any previous year. But hopefully, these things will change in 2020 and the cryptocurrency markets will be safer for every party involved in the cryptocurrency ecosystem.

Published at Sun, 05 Jan 2020 13:32:00 +0000

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Deutsche Bank Sees How The Internet Compares To Blockchain Technology




An interesting graphic compiled by Deutsche Bank compares the early-stage evolution of the Internet and blockchain technology. It shows that the two have relatively similar difficult beginnings, but ultimately the former receives more mass adoption than the latter.

Internet Vs. Blockchain Adoption Rates

Nowadays, it’s hard to imagine living a normal life without constant access to the world wide web. The Internet was one of the most disruptive and ingenious creations of the 20th century.

Blockchain, on the other hand, has been touted as similarly disruptive and intelligent technology in the 21st century by many. Deutsche Bank recently published a graphic that shows how the two have started, the middle ground, and the projected future adoption. On the left, one can see the number of internet users in millions and on the right – the number of blockchain wallet users (again, in millions).

Internet&Blockchain Adoption Rates. Source: Deutsche Bank
Internet&Blockchain Adoption Rates. Source: Deutsche Bank

The graphic indicates that both had a sluggish start, particularly in the first few years. It reveals that after eight years of existence, the Internet was at around 500 million users, while during the same timeframe, blockchain is at approximately 50 million. This whole 10x difference is projected along the entire graph.

The Internet also required less than 25 years to reach over four billion people around the world. Deutsche Bank’s forecast for blockchain mass adoption suggests that after a quarter of a century, it will be used by around 350 million.

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Even though the Internet appears way more dominant, Changpeng Zhao recently offered a different opinion. The CEO of the largest cryptocurrency exchange by volume, Binance, said that “blockchain is going to have a bigger impact on our society than the internet.”

Difficult Beginnings

Despite the Internet’s undeniable impact on the world, it had a difficult initial period of adoption. The history books reveal that it was created somewhere in the 1960s in a widely different form of what it is today. However, it wasn’t until the late 80s and early 90s before it started gaining adoption in Europe, Australia, and eventually Asia.

But even after so many years of existence in some forms, it was expensive to use and frequently unreliable. The largest U.S. internet provider in the 90s charged $9.95/month for 5 hours of unlimited access, and every additional hour cost $2.95.

With all improvements such as the introduction of DSL, 3G, 4G, etc, the Internet became a much better version of itself in the next two decades. A recent report reveals that today’s speed is 136 faster than what it was back then. Moreover, internet access is over 90% cheaper.

How what does this have to do with blockchain? Well, simply put, the latter is at its primary stages, where the promise of its future developments and disruptions is more significant than its actual usage, at least according to some non-believers. Similarly, there’re challenges with costs and scalability that ultimately prevent it from mass adoption.

With that being said, blockchain has come a long way for its relatively short period of existence. Users can safely assume that the improvements will continue with cost reductions, more scalability, and faster transactions.

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Crypto and Blockchain Firms Pitch In to Help Coronavirus Victims




Some blockchain and cryptocurrency firms have pledged to help victims of the coronavirus in Wuhan, China. Cryptocurrency exchange Binance pledged to donate 10 million Chinese yuan ($1.44 million) to the effort.

In a tweet on Jan. 25, Binance CEO Changpeng Zhao said that Binance made the pledge but did not make any announcements after a Twitter user tagged him in a news article about cryptocurrency donations being accepted for the cause:

“For #Wuhan, not realistic to do crypto to end beneficiaries. Binance pledged 10m RMB ($1.5m USD) to help #coronavirus victims. We didn’t make any announcements. But [Binance Charity Foundation] BCF/Binance team has been busy for the last few days. Still need help to arrange logistics locally.”

According to a Jan. 25 WeChat post by blockchain marketing service firm Krypital, the firm also launched a charity donation effort to acquire medical supplies for Wuhan coronavirus victims.

Krypital also announced that it will create a blockchain-based donation system that allows for greater transparency and efficiency. The firm accepts Tether (USDT) on the Ethereum blockchain.

The company is also recruiting volunteers for group administration, material purchase, sorting and transportation management, media announcements and graphic designers.

As Cointelegraph reported, yesterday Bitcoin (BTC) slumped 6% on the Chinese New Year as uncertainty surrounding the spread of the coronavirus. On Jan. 26, Fox News reported that the current death toll of the virus is 56.


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Cryptocurrency News From Japan: Jan. 20–24 in Review




This week’s headlines from Japan include several central banks collaborating on digital currency research, Binance removing the Japanese yen from its platform, Japan’s Liberal Democratic Party investigating digital assets, comments from Japan’s Deputy Prime Minister on digital currency research importance, and Coincheck paying out its first Lisk staking reward. 

Check out some of this week’s crypto and blockchain headlines, originally reported by Cointelegraph Japan.

Japanese political party proposes digital currencies

Japan’s ruling Liberal Democratic Party aims to propose a national digital asset in spring of this year, according to some reports. A parliamentary group of 70 lawmakers will reportedly submit their proposal in February and will note how the currency will act with regard to concerns about individual data security and money laundering. 

Bank of Japan and several other central banks evaluate digital currencies

News of action from Japanese lawmakers coincides with the debut of a research group of global central banks — including the Bank of Japan (BOJ) — that will study the possibilities and limitations of central bank digital currencies, or CBDCs.

The Financial Stability Board, among others, will also participate in the effort. Bank for International Settlements Innovation Hub director Benoit Coeure will sit as the group’s co-chair, alongside the Bank of England’s Deputy Governor Jon Cunliffe.  

Binance deletes Japanese yen currency pairings

Binance reportedly removed the Japanese yen from its exchange, just days after seemingly adding support for the fiat currency. While the option initially appeared on the exchange’s list of fiat spending options, it was subsequently removed.

A Binance spokesperson told Cointelegraph Japan that the yen will be restricted on the platform until support for the fiat eventually launches through a partnership with transaction processor Simplex.

Japanese Finance Minister says no digital assets on the horizon

While policymakers are showing clear signs of interest in CBDCs, Japan’s Minister of Finance and Deputy Prime Minister Taro Aso said that the immediate issuance of such an asset is not an immediate priority.

Ato noted the importance of the CBDC collaborative group’s research efforts, adding that a digital currency must have convenience and credibility. However, he added that, “There are no plans to issue digital currencies at this time.” 

Coincheck crypto exchange doles out first Lisk staking reward

Tokyo-based crypto exchange and wallet Coincheck settled its first Lisk (LSK) staking payout this week, totalling 2,251.9 LSK ($1,800). The exchange first announced Lisk staking capabilities on Jan. 9.

Staking rewards are a byproduct of the proof-of-stake consensus algorithm, that was first introduced by Sunny King and Scott Nadal via the  Peercoin (PPC) white paper in 2012.

Within such a system, token holders can “stake” their assets to help maintain the network, and in return, receive interest on their holdings.


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