Crypto Hack 2022: Cases You Should Know
Crypto prices have been plummeting. But the rate of crypto attacks has not. For example, the losses from decentralized finance (DeFi) attacks alone topped $2.6 billion in total funds as of October 2022. Which is…quite staggering, to say the least. Keep reading to find out more about the largest crypto hacks of 2022 and how you can boost your security online to minimize the risks.
Recent biggest crypto hacks revealed
First things first, many firms are open to treating the hacks as a white-hat event. This means the hacker could return the funds and get a substantial reward for having uncovered a security vulnerability. But it rarely ends that way. In most cases, users lose their money or companies pay them back themselves. So, let’s look at some of the mass crypto attacks taking place in 2022.
1. $160 million seized from crypto trading firm Wintermute
This September crypto heist drained the funds from Wintermute’s DeFi operations.
Note: Wintermute is one of the market-making firms. Such companies are key in the cryptocurrency ecosystem. As they hold many different cryptocurrencies in reserve, these companies provide liquidity to exchanges to instantly pull off large purchases.
In the exploit, one of Wintermute’s hot wallets was compromised. Most likely, this was due to a security weakness in vanity wallet addresses (personalized cryptocurrency addresses) generated by a tool called Profanity. This defect allowed an attacker to directly target compromised private keys of Wintermute users. But, despite being in debt to several DeFi platforms, Wintermute claimed that they were solvent.
2. Nearly $200 million stolen from crypto bridge Nomad
Nomad is a crypto bridge, a tool that lets users transfer tokens from one blockchain to another — say, from Ethereum to Solana. Nomad was hit after hackers yanked almost $200 million in crypto in August 2022. As researchers at crypto-focused investment firm Paradigm explained, hackers took advantage of a vulnerability in Nomad’s code. It let users enter any value into the system and withdraw the funds even if there weren’t enough available. They called the attack “one of the most chaotic hacks that Web3 has ever seen” — where Web3 is a hypothetical future version of the Internet built around blockchain technology.
“1/ Nomad just got drained for over $150M in one of the most chaotic hacks that Web3 has ever seen. How exactly did this happen, and what was the root cause? Allow me to take you behind the scenes ? pic.twitter.com/Y7Q3fZ7ezm”samczsun, researcher at Paradigm (@samczsun) August 1, 2022
3. Wormhole cryptocurrency platform hacked for $325 million
An attacker leveraged a security flaw of the DeFi platform Wormhole to flee with nearly $325 million. Wormhole is among the most popular bridges linking the Ethereum and Solana blockchains. Hackers exploited a vulnerability in the Wormhole network that allowed them to mint 120,000 Wrapped Ethereum on Solana (WeETH) in February 2022. Although all funds have been restored shortly after, and the vulnerability — patched, the hack’s magnitude shows a high vulnerability of crypto platforms.
4. $625 million swiped from the Ronin blockchain
In 2022 attackers stole roughly $625 million from the Ronin blockchain. It’s an intermediary between Axie Infinity and other cryptocurrency blockchains like Ethereum.
Note: Axie Infinity is a popular crypto game where players fight cartoon pets called Axies to win crypto and collect the game’s non-fungible tokens (NFTs). Ronin lets players exchange the digital coins they earn in the game with other cryptocurrencies like Ethereum.
The hack took place on March 23 but was discovered nearly a week later when another user tried to withdraw 5,000 Ethereum through the bridge. The Block reported that this was an elaborate phishing attack featuring a fake LinkedIn job offer — a senior engineer at Axie Infinity was duped into applying for a job at a fictitious company.
To date, the Ronin exploit is the largest DeFi hack, coming on the heels of a $322 million Wormhole theft.
Why do crypto hacks happen?
Hackers see cryptocurrency as low hanging fruit. And the repercussions of their attacks harm both the crypto platform and its users.
We can highlight two major reasons behind more and more crypto heists happening.
1. Immense user load
Crypto platforms see an influx of users. What may seem like a good thing is actually bringing some bad consequences. For example, Axie Infinity’s user base saw a drastic increase back in 2021 after the game exploded in popularity in the Philippines and other countries where players saw it as a full-time job. This forced Ronin to weaken its security procedures to cope with the bigger demand. This, in turn, may have led to the 2022 hack.
2. Badly designed and tested code
Large user loads also cause other problems. With crypto companies eager to deal with high demand or just make a great profit, they can put out poorly designed code and compromise their security. And that is even more inviting for hackers. Besides, crypto platforms, like bridges, have become key targets for hackers. Because bridges work across two or more blockchains, they multiply the possible lines of attack. They also have high asset volume and many potential exploits in their sophisticated code.
So, while many consider crypto inherently secure, security shortfalls are all over the crypto ecosystem. The good news is that there is a way to make your crypto activities just a little bit safer.
Safe crypto trading: Buy crypto with VPN
Never take security for granted. In this regard, cloaking your real IP address is always a good idea. Especially with hackers increasingly targeting crypto trading platforms. And Virtual Private Network (VPN) can help you with that. Didn’t hear much about it? Let’s go over a quick VPN 101:
- VPN is a cybersecurity software that creates a virtual encrypted tunnel for all your data.
- By connecting you to a VPN server, a VPN gives you a new IP address.
- It sends all your data to that server and encrypts it along the way.
When it comes to crypto, a VPN can:
- make your trades harder to intercept
- help against phishing attacks
- add another barrier for fighting malware
- prevent IP address tracking
- provide DNS leak protection
- allow bypassing government blocks on crypto activities
The only requirement is that a VPN provider must be reliable (duh). Luckily, we have just the VPN for you.
VeePN for crypto transactions
VeePN follows a No Logs policy (it doesn’t keep any data on the VPN server outside what’s needed to maintain the connection) and is based in Panama because of its favorable privacy laws. It’s an off-the-grid location in terms of jurisdiction — no intelligence sharing agencies will close in on you and demand user data. What else does VeePN bring to the table? Some of its benefits are:
- 2,500+ servers in 89 locations across 60 countries. Choose from plenty of locations and get the best possible VPN connection. This also means you can access any trading platform you want.
- Next-gen AES-256 encryption. Make sure neither your Internet Service Provider (ISP) nor hackers can snoop on your traffic. Have your data encrypted with AES-256 method — a gold standard in the industry.
- Payments in crypto. Make anonymous payments without risking your data. VeePN supports crypto payments via CoinPayments.
- Top tunneling protocols like WireGuard. Get both a secure and fast Internet connection.
- Kill Switch. Enable this feature to prevent data leaks — VeePN will block your Internet access in case VPN connection drops.
- Double VPN. Route all your traffic through two VPN servers instead of one to get double security.
- Dedicated apps and browser extensions. Make sure your crypto transactions are safe on all your devices. You can run VeePN on most popular operating systems and platforms, and even a router to protect your entire network!
Last but not least, you can test-drive the app on a free trial to feel its benefits. Or make a risk-free investment with VeePN’s money-back guarantee. No hassle, no risk.
After all, taking care of your online security is a must, with crypto heists and scandals being all over the place. One case even saw a once trusted crypto exchange turn into an old-fashioned Ponzi scheme — Netflix documentary Trust No One explores the mysterious death of the first cryptocurrency superstar, QuadrigaCX head Gerald Cotten (here’s how to subscribe for Netflix using VPN to get a better streaming experience). So yeah, there are two sides of the same coin when it comes to crypto. The fact that it’s digital makes it interesting and risky. Either way, you have to trade with caution, use trusted platforms, and boost your cybersecurity to minimize risks.
Should you buy crypto with VPN?
Hiding your real IP address is always a good idea if you want to improve your security online. A VPN gets the job done. It protects your data and keeps your personal information safe — an essential thing when it comes to crypto transactions. Find out more in our article.
What are the largest crypto hacks in 2022?
The crypto market has seen some serious damage this year. Some of the biggest crypto heists as of December 2022 are the hack of Wormhole crypto platform for $325 million, the Ronin blockchain for $625 million, and others. Learn more in this article.