Many in the digital currency industry like to claim that it will replace the current banking system. “Bringing down the banks” has become a mantra in some sectors of the industry, but what few talk about is the number of security breaches that actually occur in the industry and the sector’s inadequacy to replace. traditional banks.
This year alone, there have been several mind-boggling hacks, including DeFi exchanges and platforms, resulting in billions of losses for users. Let’s take a look at the biggest digital currency hacks in 2021.
Notable digital currency piracy in 2021
These hacks are listed in order, starting December 2021 and in reverse. The sums at stake are truly staggering.
- In December, AscendEX, formerly BitMax, was hacked, and more $ 77 million funds were stolen. It is understood that hackers have compromised the exchange’s hot wallet, a story that has become all too common in the digital currency world of late.
- Additionally, in December 2021, just as a crazy year for digital currencies was drawing to a close, the popular BitMart exchange was hit for $ 150 million when hackers penetrated a hot wallet.
- In August, Poly Network was hacked and the attacker fled with a $ 611 million. The stolen tokens included BSC, Ethereum, and USDC. Oddly, the hacker then returned a large chunk of the funds.
- Additionally, in August, the Japanese Liquid Exchange was hacked, and more $ 97 million has been stolen. It seems small compared to the other hacks on this list, but it’s worth stopping to think about how much money this actually represents.
- Between March and May 2021, hackers entered 6,000 Coinbase customer accounts while playing with their SMS authentication system. The exact amount of stolen funds (if any) is unknown, but many Coinbase users complain about shady activity around their accounts. One of them even launched a class action lawsuit against Coinbase over it.
- In April, two brothers who founded South Africa’s largest exchange, Africrypt, told users that the exchange had been hacked and vanished from the face of the earth with more than $ 3.6 billion in digital currencies. It’s unclear if this was really a hack that scared them enough to hide or if it was an inside job. They denied the latter through a lawyer.
While this is not a completely comprehensive list of global digital currency hacks in 2021, it does underscore just how absurd the situation has become. While the exchanges hope to act as new banks in the digital currency industry, they still have a long way to go.
To be fair, some of them, like AscendEX and BitMart, have promised to heal victims, but as we’ve seen historically, these issues can take a long time to resolve. Can anyone tell Mt. Gox?
Completely unsuitable as a new banking system
The truth is, the digital currency industry as it is will never become a new banking system. As long as it refuses to comply with strict regulations and turns a blind eye to Tether, which accounts for over 70% of trade volume, this industry will never be more than a side show or an underground railroad system used to facilitate crimes such as money laundering and drug trafficking.
These repeated hacks and breaches of trade create a bad image in the eyes of the general public and tire governments across the industry. What could change things is the original Bitcoin system designed by Satoshi Nakamoto. If we largely get rid of exchanges, which seek to create a new fee-collecting banking system and forget what Bitcoin was meant to be, and users transfer funds to and from wallets on the BSV blockchain, a great deal part of the crime and bloodshed can be stopped. As will soon be demonstrated, stolen funds can be frozen and recovered. This is how Bitcoin was designed.
Imagine if gold turned into lead when stolen. If the thief returns it, it becomes gold again. – Satoshi Nakamoto
It has been another crazy year for the digital currency industry. Will 2022 be better? Without specific regulations to protect users around the world, this is questionable. Fortunately, these regulations are coming.
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