Overview of Cryptocurrency Exchange Hacks in 2019
2019 witnessed twelve major security breaches targeting global cryptocurrency exchanges. Eleven incidents resulted in direct cryptocurrency theft, while one led to a massive customer data leak. Collectively, these attacks caused $292,665,886 in financial losses and exposed 510,000 user credentials.
Despite expectations for improved security measures, hacking activities surged compared to 2018's nine recorded incidents. The lack of universal regulatory frameworks and inconsistent security protocols across exchanges exacerbated vulnerabilities, making 2019 a record-breaking year for crypto theft.
Detailed Timeline of 2019 Exchange Hacks
1. Cryptopia (New Zealand)
Date: January 14, 2019
Loss: $16,002,108
Hackers infiltrated Cryptopia’s hot wallets, stealing over 20 types of cryptocurrencies within two weeks of the new year.
2. LocalBitcoins (Finland)
Date: January 26, 2019
Loss: $27,000
Attackers replaced official forum links with phishing pages, compromising six user accounts to steal 7.9 BTC.
3. Coinmama (Israel)
Date: February 15, 2019
Compromised Data: 450,000 account credentials
The brokerage’s database was breached, leaking usernames and passwords publicly.
4. DragonEx (Singapore)
Date: March 24, 2019
Loss: $7.09 million
An APT attack drained USDT stablecoins, labeled by the exchange as its "biggest challenge since 2017."
5. CoinBene (Singapore)
Date: March 25, 2019
Loss: $105 million
Users detected abnormal outflows from hot wallets during "maintenance." Despite blockchain evidence, CoinBene denied the hack.
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6. Bithumb (South Korea)
Date: March 30, 2019
Loss: $18.7 million
An insider attack was blamed for the theft of EOS and XRP tokens.
7. Binance (Malta)
Date: May 7, 2019
Loss: $40 million
7,000 BTC were stolen, alongside API keys and 2FA codes. Later, 60,000 KYC records were exposed.
8. GateHub (UK)
Date: June 1, 2019
Loss: $10 million
100 XRP wallets were compromised, with 23.2 million XRP siphoned off.
9. Bitrue (Singapore)
Date: June 26, 2019
Loss: $4.23 million
Hackers accessed 90 user accounts to breach hot wallets, stealing XRP and ADA tokens.
10. BITPoint (Japan)
Date: July 11, 2019
Loss: $32 million
Unauthorized outflows drained multiple cryptocurrencies, affecting users’ funds.
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11. VinDAX (Vietnam)
Date: November 5, 2019
Loss: $500,000
Obscure tokens from startups were targeted, with limited details disclosed.
12. Upbit (South Korea)
Date: November 27, 2019
Loss: $49,116,778
342,000 ETH vanished from hot wallets. Upbit pledged to reimburse users from reserves.
Key Takeaways and Industry Implications
Total Impact
- Financial Losses: $292.7 million
- Data Leaks: 510,000 records
Critical Issues Highlighted
- Regulatory Gaps: Jurisdictional ambiguity persists.
- Security Standardization: Absence of uniform practices.
- Insider Threats: Bithumb’s case underscores internal risks.
FAQ Section
Q1: Why are crypto exchanges prone to hacks?
A: Fragmented regulations and inadequate security protocols create vulnerabilities.
Q2: Which coins were stolen most frequently?
A: BTC, XRP, and ETH dominated thefts due to their liquidity.
Q3: How can users protect their assets?
A: Use cold wallets, enable 2FA, and avoid sharing API keys.
Q4: Did exchanges reimburse affected users?
A: Only some (e.g., Upbit); others offered no compensation.
Q5: What’s being done to prevent future hacks?
A: A few nations (Canada, Malta) have enacted crypto-friendly laws with security guidelines.
Conclusion
The 2019 cryptocurrency hacks revealed systemic flaws demanding urgent action. While progressive jurisdictions like Wyoming and Malta pioneered regulatory frameworks, global coordination remains lacking. For the ecosystem to thrive, exchanges must prioritize transparency, standardized security, and user protection.