The total amount of stolen funds in cryptocurrency exchange hacks has exceeded 15.6 billion dollars from 2011 to 2020, according to research by Crystal Blockchain and Cointelegraph. More than 50 exchanges were affected, with some experiencing multiple breaches. The vulnerability of cryptocurrency exchanges makes them the prime target for cybercriminals. 27% of the observed crypto attacks directly targeted these exchanges. Weak security measures employed by the exchanges’ hot wallets have been the main reason for these attacks. Exit scams orchestrated by platform owners also contributed to the problem.
Hackers exploit various techniques to gain unauthorized access to cryptocurrency exchanges. Cross-Site Scripting Attacks, misconfigured web devices, and exchange code vulnerability are common methods used by hackers. Smart contract vulnerabilities and social engineering tactics such as phishing are also common. Cryptocurrency exchanges employ several anti-hacker measures, including multi-factor authentication, multi-signing, and distributing funds between hot and cold wallets.
Hacking cryptocurrency exchanges remain a lucrative business for cybercriminals, with the continuous evolution of their tactics. Ensuring the security of exchange code and protecting third-party libraries and development environments used during the creation of the platform are also important. User account compromises on exchanges are often caused by carelessness in securing their funds than the exchange’s negligence, and users are advised to avoid storing cryptocurrencies on online exchanges for a long time.
Crime in the cryptocurrency space is less prevalent than in traditional financial institutions. Being careful, researching user reviews, and adhering to exchange regulations is often enough to navigate safely.