The Biggest Crypto Hacks in 2023 | How We Do to Avoid and Prevent

Security concerns are a major issue in the web3 realm. To address this, constant updates and advanced solutions are crucial. Shockingly, there have been approximately 1,435 hacking incidents in the crypto space, resulting in staggering losses of over $31.6 billion.

Now, let’s delve into some of the significant hacking events that transpired in the past year.

Major Crypto Hacks in the Last Year

In 2023, despite a decrease in overall hack volumes by over 50%, hackers still managed to steal around $1.7 billion worth of cryptocurrency. Several high-profile hacking incidents occurred throughout the year, impacting projects like Mixin Network, Multichain, Euler Finance, etc.

Mixin Network

Mixin Network, a crypto project based in Hong Kong, experienced a significant setback when it fell victim to the largest crypto exploit of the year. On September 23, the company abruptly ceased operations after hackers siphoned off a staggering $200 million from users’ hot wallets. Mixin reported that hackers attacked the database of its cloud service provider, potentially compromising the private keys of users’ accounts.

Euler Finance

In March 2023, the DeFi lending protocol Euler fell victim to an exploit resulting in the disappearance of $197 million worth of crypto. The attacker manipulated the exchange rates between Euler-issued stablecoins, triggering liquidations of borrower positions and siphoning funds from the protocol. However, in a surprising turn of events, the attacker later returned most of the stolen funds, providing relief for the victims.

Multichain

Cross-chain bridge Multichain suffered an exploit in July, resulting in the loss of $126 million in cryptocurrencies across different supported blockchains. The hack occurred shortly after the bridge was halted due to unforeseeable circumstances. The exact cause remains unclear, with speculation suggesting compromised smart contract private keys and concerns about the involvement of the Multichain team.

Poloniex

In November 2023, suspected North Korean Lazarus Group hackers stole $120 million from Poloniex’s hot wallets, likely by gaining access to private keys. Trading and withdrawals were halted, with the exchange promising reimbursement to affected users. Poloniex, acquired by Tron founder Justin Sun in 2019, has operated as a centralized exchange since 2014.

BonqDAO

On February 2nd, 2023, the Polygon DeFi protocol BonqDAO suffered a $120 million loss in the largest oracle exploit of the year. Exploiting a vulnerability in BonqDAO’s price feed smart contract, the attackers manipulated the price of the ALBT token, enabling them to borrow 100 million BEUR stablecoins and swap them for other tokens on Uniswap.

Frequently, the root cause of these incidents lies in the exploitation of private keys, providing unauthorized access to users’ funds. This vulnerability, often exploited by attackers, poses a significant threat to the security of cryptocurrency platforms. Moreover, many of these security breaches occur due to the insufficient protection of project security systems. When these systems are compromised, attackers can infiltrate the platform’s user database, gaining access to sensitive information and hot wallets holding users’ assets.

Given the severity of these security challenges, it becomes imperative for security professionals to devise robust strategies to address similar cases effectively. By understanding the vulnerabilities exploited by attackers and implementing comprehensive security measures, platforms can mitigate the risks associated with unauthorized access and protect users’ funds from malicious actors.

Therefore, let’s delve deeper into the strategies employed by security professionals to safeguard cryptocurrency platforms and enhance user security in the face of such threats.

Industry Leading Solutions from Top Security Providers

SlowMist is a security firm established in January 2018, SlowMist specializes in blockchain security, offering:

1. Wallet Security Audits: Comprehensive assessments incorporating unique private key architectures and practical security knowledge.
2. Tracking Service: Expert blockchain forensic investigation for cryptocurrency-related crimes.
3. Red Teaming: Real vulnerability assessments, focusing on personnel, business systems, supply chains, office systems, and physical security. Customized security solutions are provided based on evaluation results and user requirements to fortify core nodes and deter attackers effectively.

FireBlock provides a wide range of digital asset management and security solutions, including treasury management, wallet-as-a-service, tokenization, payments, governance and policies, off-exchange trading, security, staking, Web3 development, Fireblocks Network connectivity, flexible deployment options, compliance integration, and access to DeFi apps.

Safeheron utilizes MPC-based cryptography to eliminate single points of failure on private keys. Its policy engine with hardware isolation prevents internal collusion and human error, while a zero-trust security architecture defends against third-party malicious acts. Users retain complete control over recovery phrases of all key shards, ensuring asset recovery even if Safeheron’s service is unavailable.

Cobo offers three custody solutions: Full Custody, MPC Co-Managed Custody, and Smart Contract Custody. Full Custody features bank-grade HSM, Intel SGX, and battle-tested risk policies. MPC Co-Managed Custody employs advanced multi-party computation to eliminate single points of failure. Smart Contract Custody offers a multi-sig wallet with granular access controls and custom workflow tools.

HyperBC offering, MPC Wallet as a Service: HyperBC is a leader in digital asset custody and payment solutions, facilitating secure transitions to Web3 for businesses. Trusted by 300+ merchants globally, HyperBC’s MPC Wallet as a Service is certified by the MPC Alliance and ensures robust data management and security. With industry-leading low processing fees (0.5%) and comprehensive risk control strategies, it offers a secure solution for managing digital assets.

A huge plus to the business owners, White-Label Card Solution: HyperBC’s white-label card solution enables global payments, available in over 176 countries, and supported by 50 million merchants. Users can launch their own Crypto Visa, Mastercard, and UnionPay cards with easy KYC processes, high consumption limits of up to $50,000, and support for global ATM withdrawals.

Dive into HyperBC security pyramid

Let’s explore in more detail the operational procedures of HyperBC, a leading crypto custodian.

HyperBC prioritizes regulatory compliance, holding licenses across eight countries, including MSB and Virtual Asset Service Provider permits.

Certification is another key aspect, with HyperBC boasting ISO Certification from Callids Global, covering secure MPC Wallet as a Service, virtual and physical cryptocurrency card provision, secure API cryptocurrency payment gateway solutions, and physical cryptocurrency POS & ATM Kiosk provision.

Risk assessment is crucial, ensuring transaction security through identity verification, permission authentication, approval processes, trusted execution environments, MPC signature authentication, and on-chain processing. Asset transfers require approval from designated parties based on predefined team roles and rules.

AML & KYT mechanisms involve advanced machine learning for address categorization and suspicious transaction identification. This non-blocking approach allows merchants to decide on flagged transactions.

HyperBC offers digital asset custody and payment solutions, featuring its MPC WaaS Infrastructure, operating across platforms and clouds with the MPC-CMP protocol. This infrastructure eliminates single-point failures and protects assets from cyber-attacks and human error.

Key components include the MPC-CMP protocol, TEE & TSS-RSA technology, and the TAP Engine for transaction authorization policies. This solution ensures secure management of crypto assets, accessible from anywhere with an internet connection, and integrates seamlessly into various applications and platforms.

In summary, HyperBC provides flexible solutions tailored to customer needs, including cold, warm, and hot wallets, along with custody options. Their advanced MPC technology enables effective asset management, suitable for enterprises of all sizes.

For learn more about HyperBC: Book a FREE DEMO