Crypto.com is a Singapore based cryptocurrency exchange with a reported ten million users and 3,000 employees. The exchange confirmed on January 17th, 2022 that unauthorized withdrawals were initiated. The lost funds include 443.93 BTC, 4,836.26 ETH, and $66,200 in other currencies. The total funds stolen were worth approximately $34 Million.
On January 16th, 2022, Crypto.com tweeted that they were receiving reports of unusual withdrawal activity from a number of their customers.
In a followup tweet, Crypto.com requested all users reset their two-factor authentication in order to sign back into their accounts. Withdrawals were also suspended for a short period of time. All normal exchange features were reinstated within 14 hours.
Crypto.com CEO Kris Marszalek stated in an interview with Bloomberg that all lost funds were reimbursed by the company. It was later reported that 483 users lost funds.
Previous Exchange Hacks
A number of exchanges and other centralised services have been hacked over the years often resulting in complete loss of customer funds without any reimbursement from the companies involved. In some cases, the exchange founders themselves have disappeared with customer’s funds.
The first reported exchange hack occurred in 2011 where an auditor’s computer at Mt. Gox was infiltrated. Mt. Gox would later be infamously known for the 2014 hack of 850,000+ Bitcoin. Several lawsuits filed against the exchange are still ongoing. The appointed Mt. Gox trustee, Nobuaki Kobayashi, and creditors have reached a final binding rehabilitation plan. Kobayashi has not yet released a repayment date.
More recently, BitMart suffered a hack in which it lost nearly $200 Million in customer funds. There have been no updates on whether victims were compensated for any losses. Services such as exchanges are considered “honey pots” due to high value of funds held there for and on behalf of customers. This makes them highly attractive as targets for potential hacks. Hacks can occur both because of poor security measures or simply because the large payout for hackers mean that they can expend a great deal of resources to breach even highly complex security systems. Social engineering attacks are also common.
Many bitcoiners are strong proponents of holding your own keys. By sending Bitcoin to a hardware wallet or offline storage device to which they hold the keys, users greatly reduce their attack surface as any theft would have to be carried out by physically gaining access to the holder’s hardware device or private keys.
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