Why do hacks still occur?

[OcTradism]

The first theory is they actually have a good team of professionals to secure the exchange system. But the technology keep fast moving forward so do the hacker so they try to find the vulnerabilities on the system, in fact, white hacker and bounty hunter get paid to find a bug.

As a business, they can not blame on their business growth (that is too speedy) for their failure to secure their platform and protect their customers' accounts and funds. Big or small business, they always are responsible for security system on their platform, first to protect their platform, second to protect their customers, lastly to maintain chance to scale up their business in future.

If a platform fails to do it, it is their failure and customers will walk away, find other alternatives that are abundant enough to choose.

The second theory the exchange didn't get hacked at all tho they only wanted to exit scam but this theory only a conspiracy theory hahahh but anything could be happen right?

Scam exits are the worst scenarios for people who store their coins and money in online accounts.

Reminder: do not keep your money in online accounts

Some history of exchange graveyards (hacks, scam exits).
Exchange graveyard
Hacked Exchanges since 2011
Report on Crypto Exchange Hacks

But people as individual customers can secure their accounts and funds by learning and having better practice.
Good topics on security and privacy

[1715342238]

1715342238

[1715342238]

1715342238

[1715342238]

1715342238

[1715342238]

1715342238

[1715342238]

1715342238

[crwth]

It's like asking why people make mistakes and why people innovate stuff. It's when people want to have easy money and then they are trying their best to get into a certain system. That system is created by people and that can be studied and maybe put to the test by analyzing and finding a loophole then hacking can happen.

There are two sides, the hacker and the hackee. A hacker always finds ways to get inside the system and takes advantage of certain bug or something then it can happen. The hackee or the target will try and find bugs and exploits that could prevent the hackers to get into the system. That's just how it works.

There's nothing "impenetrable" I believe. As long as someone is trying, it can be. It's just that it would take time for sure.

[zaim7413]

Hacking is still the biggest problem in the digital era, anyone can become a victim of hackers including several well-known crypto exchange platforms, government agencies and there are also several cases of internal losses due to hacker attacks. Incidents after incidents of hacker crimes need to be anticipated by choosing a safer storage location. You must manage your own assets to avoid cases that ever occur.
Behind every hack that has occurred there is certainly a good side, the platforms affected by the hack will immediately evaluate the vulnerabilities that exist on their platform. It also needs to be underlined, as new technology develops on the Internet, hackers will find new ways to penetrate it. So every individual who is involved in the crypto sector must be careful in safeguarding their assets.

[tabas]

3. The fact that nothing is totally unhackable.

This is very frightening! but these companies can make their security protocol difficult that it is discouraging for hackers to consider hacking right? I think they are not preemptive.

Yeah, they can do that and what they are doing is just letting a third party security partner do the thing for them. And that's already there before they establish the exchange or service. But just like the others during their early days, the security wasn't tight for them and that's when they become serious when they're seeing the growth of their business. Somehow, the staffs needed to be trained in security matters too. Because one wrong move especially on those who takes tickets and concerns, when they've been penetrated through that. Then, they will definitely going to lose their jobs.

[Fiatless]

Is it not possible for the system to be impregnable?

Some hacks are carried out by former employees of these exchanges because they know some loopholes in the security system. In some cases, these hackers work with insiders who them access or expose some security breach in the system. Like in the case of the FTX hack many blockchain experts suspected that it was done by a high-level insider.  So we might never see the end of these hacks because greed and selfishness will always exist. Crypto firms should change their security system when a staff in such a department resigns.  It will not also be out of place for firms to work with more than one security system or provider. It will be difficult for these criminals to deal with two security layers than one.

[Outhue]

Hire all the best cyber experts in the world, bribe many hackers to work for you to prevent hack attacks and so on, there will still be some vulnerability somewhere and those hackers will be the ones finding it first.

There is nothing anyone can do to prevent hacks from happening, the only solution left is to make things harder and more complicated for hackers to find doors into your security system, make it even tougher than it was yesterday.

Be one step at least ahead of hackers, this is the solution and also make sure that as a business runner, you have collateral funds available, so that your business won't face its demise and your customers will still trust you.

Maybe in the future, a solution may occur that will make stolen funds by hackers from cryptic exchnages impossible to cater away with, but right now it's not the case.

[tech30338]

Why do exchanges and companies that offer bitcoins/crypto related services still have security vulnerability that they get hacked? Are they not supposed to be professionals with securing their system, or have learnt from the experience of other companies that were hacked?

Ronin Network: $625 Million
The largest cryptocurrency hack to date was conducted in March 2022 and targeted the network that supports the popular Axie Infinity blockchain gaming platform. Hackers breached the Ronin Network and made off with around $625 million worth of Ethereum and the USDC stablecoin. The U.S. officials said that a North Korean state-backed hacking collective, Lazarus Group, was linked to the theft. Binance was able to recover $5.8 million of the stolen funds a month later, but it would still be the largest hack in history.


Poly Network: $611 Million
In August 2021, a lone hacker pounced on a vulnerability in the Poly Network decentralized finance platform and made off with over $600 million. The project’s developers issued an appeal on X (formerly Twitter) for the stolen funds, which included $33 million Tether. The Poly Network then established several addresses for the funds to be returned and the unknown hacker began to cooperate. After only two days, around $300 million had been recovered and it emerged that the hacker had targeted the network “for fun” or as a challenge.


FTX: $600 Million
In November 2022, FTX, one of the most powerful players in the crypto industry, declared bankruptcy. On the day it filed for Chapter 11 bankruptcy, more than $600 million was stolen from its crypto wallets. Many FTX wallet holders reported $0 balances in their FTX.com and FTX US wallets.

The crypto exchange confirmed the hack on its Telegram channel, saying: ''FTX has been hacked. FTX apps are malware. Delete them. Chat is open. Don't go on FTX site as it might download Trojans." FTX General Counsel Ryne Miller later tweeted that the crypto exchange was making ''every effort to secure all assets, wherever located."

Binance: $570 million
In one of the most high-profile attacks in cryptocurrency history, the Binance exchange was hacked for $570 million in October 2022. A cross-chain bridge, BSC Token Hub, was exploited by hackers, resulting in the creation of extra Binance Coins (BNB) and the withdrawal of 2 million BNB tokens. BNB is the native token of the crypto exchange. A bug in a smart contract enabled the hack, highlighting the need for tighter blockchain security.

$20.6 billion
The amount of cryptocurrency stolen from exchanges and other platforms in 2022.

Coincheck: $534 Million
In January 2018, the Japanese exchange Coincheck suffered an attack to the tune of $523 million NEM coins valued at about $534 million. The vulnerability was created by a hot wallet, which is a live cryptocurrency wallet and not as safe as an offline cold storage wallet. At the time, the Coincheck hack was larger even than the notorious Mt. Gox hack; NEM Foundation president Lon Wong described it as "the biggest theft in the history of the world."

Coincheck was able to survive the hack and continued to operate, despite being bought out a few months later by the Japanese financial services company Monex Group.

Mt. Gox: $473 Million
The first major crypto hack occurred in 2011 when the crypto exchange Mt. Gox lost 25,000 bitcoins worth approximately $400,000.  At that time, the crypto exchange was handling nearly 70% of all bitcoin transactions.

The attack didn't stop and Mt. Gox was attacked again in 2014. It lost almost 650,000 of its customers' bitcoins, and around 100,000 of its own. At the time that was 7% of all bitcoins, and worth around $473 million. Initial reasons for the coins' disappearance were unclear, but later evidence showed that the coins were stolen from the company's hot wallet.

Wormhole: $325 Million
The decentralized finance platform Wormhole was targeted in February 2022, with $325 million taken by hackers. The attack had been made possible by an upgrade to the project’s GitHub repository, which was not then deployed to the live project. The popular cryptocurrency bridge had to plug the hole in the project’s finances after the funds were not recovered. This was also the largest theft that included Solana, one of the rivals to Ethereum's dominance in the worlds of DeFi and NFTs. Up to $47 million was taken in the blockchain's native SOL token.

Bitmart: $196 Million
December 2021 saw a hack of the Bitmart centralized exchange with losses of $196 million. The hack was first spotted by a security analysis firm, which noted BitMart addresses being drained of their balance. Around $100 million in various cryptocurrencies were funneled via Ethereum, with another $96 million exiting through Binance Smart Chain. All of the tokens were moved to an address labeled by Etherscan as the “BitMart Hacker.''

Nomad Bridge: $190 Million
Only one month before the Wintermute breach was a more significant hack of Nomad Bridge, which drained $190 million of the project’s funds. Nomad is a cryptocurrency bridge that lets users swap tokens between blockchains, but those have become the latest target for hackers. That is due to the considerable value of assets they hold and the complexity of the smart contract code on which they run.
 Nomad Bridge later recovered $36 million of the stolen funds.


Beanstalk: $182 Million
This hack involved the exploitation of a decentralized finance (DeFi) platform. The attacker used a DeFi product called a “flash loan,” which allows users to borrow large amounts of cryptocurrency for very short periods. After borrowing $1 billion, the hacker took a 67% controlling stake in the project and approved a transfer of funds to their wallet before repaying the loan and disappearing. The entire process of executing the hack took only 13 seconds.


Wintermute: $162 Million
Wintermute, a leading cryptocurrency market maker, was attacked in September 2022. The project lost around $160 million in a hack, and it made things worse for Wintermute because they owed $200 million to other participants in the market. A 10% bounty was offered by the CEO to the hacker if they returned the funds.

The Largest Cryptocurrency Hacks So Far

Is it not possible for the system to be impregnable?

All securities have a weakness the only question from the securing side is how will they react once those vulnerabilities are found, and on the side of the hackers is how fast they are penetrating those weaknesses in the security, this is the reason why I think everything has logged so that you know what is happening, once you go in public, for example, a certain website a hacker will not stop attacking that site, there is were the security build or setup comes in, this is why there is a feature when a certain ip try to access multiple times with a wrong credentials they are block etc.

[LogitechMouse]

3. The fact that nothing is totally unhackable.

This is very frightening! but these companies can make their security protocol difficult that it is discouraging for hackers to consider hacking right? I think they are not preemptive.

Yes they can... or can they? I mean if they can then there should no more hacking incident that's happening right? But it's still happening despite the project increasing it's security protocol... or are they increasing it?

If hackers find the project too hard to hack even though they're experts, they will find another one, and another one, and another one until they find a prey where the security can easily be breached. Like @mk4 said, some of the projects have developers that are complacent enough that they're focusing more on the marketing than the security thus, they're being hacked. I still remember the hacking incident of Ronin. I believe that they became complacent because they're becoming more, and more popular at that time, that they forgot to increase their security.

It's frightening yes, but we can do something about it. As to your question if it's possible for the system to be impregnable? No, but with AI, we might see a difference. We don't know since it's too early to tell.

[knowngunman]

If hackers find the project too hard to hack even though they're experts, they will find another one, and another one, and another one until they find a prey where the security can easily be breached.

This is just the fact. The more the technology is advancing in security system, the more sophisticated the hackers becomes. Hackers are always observant, looking for a slight way for the victim to slack and take the advantage. The only way to improve the security system or to prevent the hackers is frequent upgrade and constant monitoring by the company's security experts. Although, some of the security experts can not be trusted because they also compromise or accomplice in the hacking process and pretended to be innocent. This is one reason why banks use to relief their staffs when there's security breach or attacks either in physical or digital. I think the reason for this increment of hacking is due to traceless nature of crypto in my opinion.

[Questat]

This happens because they underestimate hackers not knowing their capabilities and expertise in doing this. Even if they know (exchanges) they are still prone to such things as these hackers will holes in the security system and get through it. This will give us an idea of why we should not use an exchange wallet as our storage wallet. And no matter what they do to enhance their security level, hackers will also be spending their time going beyond and gaining access to their keys.

[Adbitco]

There are two theories

The first theory is they actually have a good team of professionals to secure the exchange system. But the technology keep fast moving forward so do the hacker so they try to find the variabilities on the system, in fact, white hacker and bounty hunter get paid to find a bug.

The second theory the exchange didn't get hacked at all tho they only wanted to exit scam but this theory only a conspiracy theory hahahh but anything could be happen right?

These are more like different categories rather than different theories.
When we say "exchanges" we are talking a bout many different companies, for example something like Yobit is different from Coinbase! The former is a shady business and the later is a registered and regulated company.

So it is not a "conspiracy theory" when we say some exchanges scammed their users by lying to them about being hacked. There are actual cases of this happening. There are also other cases where despite all the effort the exchange puts into securing their system, they still get hacked.

When exchange got hacked do we really know they got hacked what are the things to show exchanges are telling us the truth about their being backed, and again does a regulated or registered exchange provides missing funds or stolen funds if there is a function like this then I believe they will increase their security majors infact it would be their topmost priorities to safeguard investors funds that is in their custody if there were to be a compliance or term that guides investor through they wouldn't allow any shady hack to happen.

[Razmirraz]

Can they really defeat the cyber criminals who have high networks connection within the internet and have taken over major exchange and other accounts who falled victim to them, i must say fhat the role of an insider is higly significant in such crimes because i believe that there can never be any hack without an insider or a back door access.


All fhe major hacks that have happen within the recent times have all pointed to security vulnerabilities and at that we have to focus on some neglected facts and factors that have warranted such incidents.

Cybercriminals are very difficult to overcome or defeat, their ability is extraordinary in infiltrating the targeted network and then taking control of the targeted company. Hackers once controlled the FBI's network and email servers. In November 2021, even though the perpetrators may be from different groups, their hacking skills are very difficult to stop.

The role of insiders may be related to the hacking, they deliberately leak data for personal gain. This incident has happened several times on different exchanges, hackers have started targeting crypto exchanges because every time they succeed they can get large amounts of money. Crypto players must be more careful in choosing where to store their assets so they don't become victims of hacking.

[pawanjain]

As long as we are using computers/mobiles or lets say any machines, they will be hackable because there is no perfect code out there.
Even the best code can be vulnerable is an expert tests it. Every system has bugs and only the master minds can find it and exploit it.
Besides that, there is a shortage of cyber security employees which is why companies fall prey to such attacks.

[mvdheuvel1983]

Why do exchanges and companies that offer bitcoins/crypto related services still have security vulnerability that they get hacked? Are they not supposed to be professionals with securing their system, or have learnt from the experience of other companies that were hacked?

Is it not possible for the system to be impregnable?

So long as security systems are not made by God, they will always be vulnerable to hacks and other security attacks. Hackers are getting smarter and more sophisticated. They are relentless. Some hackers even do it for the fun of it as a sort of ego boost.

I don't know how feasible this is but if these exchanges can have like a competition where hackers would try to break into their security infrastructure and then there will be a price for whoever is successful. This would help them to test their security structure and help them improve.

[CryptSafe]

There is every possibility that hacks do not just occur like that. There must be a preplanned scheme by the hackers which definitely in most cases have an insider as a source of information. Most hacks are not what people think they are as some of them were just to distract and confuse investors and holders not to think otherwise.

One thing we should know is that as long as this world continue to exist, there must be some categories of humans out there that are just good at stealing from other peoples resources. Hackers take advantage of loopholes in the security mechanism of exchanges, casinos and others as the case maybe.

As a Crypto organisations, there must be a constant site update, upgrade and maintenance so as to make it very narrow for any such incidence out there .

[CryptopreneurBrainboss]

Why do exchanges and companies that offer bitcoins/crypto related services still have security vulnerability that they get hacked? Are they not supposed to be professionals with securing their system, or have learnt from the experience of other companies that were hacked?

There's no professionalism in the altcoins and exchange sector, all they're after is power and market dominance of whatever is left from Bitcoin domination because who controls the market makes the most profits and it's profit hurting they're all after that's why there are lots of inferior projects getting launched but since we're in an unregulated market, nobody is doing anything. Most exchanges/projects that has millions passing through them daily shoudn't have had 1 cent in their market cap because they're just duplicate of already existing ideas with little to no improvement made. We'll keep having hack incident because most projects in the industry are built on a faulty centralized system (server) and instead of allocating money for security upgrades, money are been allocated for marketing to create buzz  and hype around the project or platforms to attract more customers for them to make money.

The second theory the exchange didn't get hacked at all tho they only wanted to exit scam but this theory only a conspiracy theory hahahh but anything could be happen right?

This is actually happenings because the rate at which projects are getting hacked and disappearing out of the market only points towards inside job and exit scam schemes. Many projects has been doing this and many more will do it in the future that's why we're been discourage from trusting these project because they can crash at any moment and nothing will be done about it. Alot of scammers has rugged pulled their scam tokens and disappear with investors money and nothing can be done. Exchanges have done the same with the excuse of been hacked so it's not a conspiracy theory but it's something that's actually happening and the best way to protect ourselves is to stay away from this projects with too good to be true promises.

[edmundduke]

Why do exchanges and companies that offer bitcoins/crypto related services still have security vulnerability that they get hacked? Are they not supposed to be professionals with securing their system, or have learnt from the experience of other companies that were hacked?

Is it not possible for the system to be impregnable?

Actually there are WAY less hacks, BUT the hacks are much larger. Back in the hacks were almost a daily occurance, or at the very least a weekly thing. BUT since the amounts were much smaller, we did not even hear about them.
Now that the hacks are much larger, they are way more visible.

As for the cause. Some them are most likely insider jobs. As for actual hacks, a huge factor is the NK state effect. It has been revealed that NK state hackers have been behind many of the largest heist. They are untouchable. Even if you find out who did it, you cant go after them.

[BitDane]

There are two theories

The first theory is they actually have a good team of professionals to secure the exchange system. But the technology keep fast moving forward so do the hacker so they try to find the vulnerabilities on the system, in fact, white hacker and bounty hunter get paid to find a bug.

We can't call the security team a good team when their task to secure the platform failed. If they are a good team no matter how fast moving the technology is, they are able to cope up with it and at least is one step farther than hackers.

The second theory the exchange didn't get hacked at all tho they only wanted to exit scam but this theory only a conspiracy theory hahahh but anything could be happen right?

It is very possible that the hack can be an inside job.  One of the security staff maybe plan the hack and leak out the vulnerabilities of the platform security so that hackers can easily bypass the security and exploit the platform fund.

Exit scam through hacking incident is also possible since users will have a hard time finding out that the project owner themselves hack their own platform.