Major Crypto Theft in Cryptocurrency
A cryptocurrency is a form of virtual currency wherein binary data is collected and designed to work as a medium of exchange. The transactions are recorded in a ledger that uses a strong layer of cryptography and is fully computerized. Hence, it secures the transaction free from any hacks or manipulations. It is a fully automated feature, free even from any intervention from even the creators of the asset, that helps create, control additional coins, and verify the coin’s details and the crypto transactions.
Some developers prefer to use a proof-of-stake model wherein the owners must use and deposit the tokens as collateral to secure the transaction. What is striking to note is that cryptocurrency follows a decentralized approach and control instead of a traditional central banking structure.
Cryptocurrency lacks physical form like a currency note or paper money and hence does not need to be regulated and mandated by a central bank. It operates through a decentralized ledger which is a public financial database.
Many industry experts and Analyst opine that blockchain and related technology have seen tremendous growth in recent times and is believed to grow even further. It is believed to disrupt not only finance but also other sectors like law, agriculture, etc.
Bitcoin was notably the first cryptocurrency to be developed and is still the most traded and valuable cryptocurrency. It was developed in 2008 by a group of individuals by the name ‘Satoshi Nakamoto’. As of August 2021, nearly 18.8 million bitcoins remain in circulation and hold a market cap of US$ 858.9 billion.
Advantages and disadvantages of dealing in cryptocurrency
Cryptocurrencies were developed with the hope and aspiration to make a transaction and fund transfer easier and faster between two parties. It also tried finding a solution to reduce the need for a third party such as a bank or financial institution to facilitate the transaction. Fund transfers with minimal processing fees and lower transactions compared to traditional banking transactions were some of the advantages it served. On the contrary illegal activities like tax evasion, money laundering sprung up.
Thus an ever-increasing volume and minimal legal requirements to conduct a crypto transaction gave rise to illegal activities Crypto Theft in the history of Cryptocurrency
Major Crypto Theft in Cryptocurrency
As we talk of recent history, Poly Network, a platform connecting multiple blockchains, fell prey to hackers. They stole nearly $600 million, which still remains one of the major crypto thefts. The hackers found a loophole that they exploited.
The hackers sent a message to Poly Network quoting as “ready to return” the money. The Defi platform of Poly Network replied back with the crypto address. At 7 am London time, the hackers returned roughly $4.8 million, and by 11 a.m London Time, nearly $ 258 million were returned to the hackers.
This pinpointed the loophole in the system of Poly Network, raising a cause of concern and dented their reputations.
Furthermore, Binance, one of the leading cryptocurrency exchanges succumbed to another crypto theft of nearly $ 33 million. The security of the platform was thus challenged after the theft.
The Decentralized Financing (Defi) sector is subjected to constant hits, crimes, and thefts, with an all-time loss of $ 474 million. The overall loss and cybercrime in the cryptocurrency space have reduced to $ 681 million in fiscal 2021, from a theft value of $ 1.9 billion in FY20 and $ 4.5 billion in FY19.
Moreover, the Defi-related attacks reached a value of $ 361 million in FY20, up by three times on a Year-over-Year (YoY) basis. The Defi-related crimes were 54 percent of the total crime value compared to 3 percent, a year ago.
Although Crypto is said to be a very secured platform even the same has seen major thefts and even more attempts at the same. But the instances have been very few. In fact, if we calculate the percentage of the amount of theft against the amount transacted for Crypto, the same will still be very less as compared to the percentage of theft and frauds that have happened in the Real Currency.
Again, the instances listed above are the major cases where the theft has occurred with the major exchanges. There is another risk area that remains where the Crypto may be stolen from the wallets of individual investors. This is the case of a lapse in security on the part of the investors. In order to prevent any such mishaps, the individual investors and the users of the wallets are advised to move ahead with caution and take proper tutorials of usage before investing money with any exchange. coin gabbar takes the issue of security and theft seriously and is working on detailed tutorials and do’s and don’t so that the investors are safeguarded against any thefts and possible security lapses.