The real victims of mass crypto-hacks that keep happening

Taxi driver Chris is obsessively checking his phone for updates.

“I’m set to lose almost 2,500 euros (£2,100) worth of cryptocurrency coins,” he says. Chris describes himself as “a small crypto-holder from Austria” and is one of many victims of a hack attack on cryptocurrency exchange Liquid Global last week. The company has insisted it will pay all customers who lost out in the $100m (£72.8m) attack. But until they get the money back, many customers are worried. Every time 38-year-old Chris picks up a customer in his ageing Volkswagen, he’s reminded of what’s at stake.

“My car is more than 20 years old and I could have bought a new used car with that money,” says Chris. “It’s not catastrophic, but still quite a sum for me. I need at least one year to save that sum.”

‘My stress is at eight out of 10’

In Indonesia, 27-year-old Dina says she is in shock. “I’m feeling so angry with the hackers, and I’m feeling stress for myself. I have around $30,000 and I need that money to live on. I’m just a housewife trying to make money from crypto.” At the other end of the scale, a 42-year-old Norwegian doctor says he is struggling to concentrate, because he could lose a fortune that he’s watched grow over the years. “My Liquid balance is 969,000 euros. It’s extremely worrying to me and my stress is at eight out of 10. I’m always thinking about it.”

Panicked parents

In Sydney, James describes the stress the hack has put on his parents, who managed to cash out at a loss before the company blocked transactions. “My mum and dad had one Bitcoin on there, so about 70,000 Australian dollars (£37,000). It was, and is, a lot of money to them. “There’s obviously stress created. At first they had no idea what was happening, then they felt they were basically forced to sell in a panic and withdraw which means they lost about A$10,000.” Liquid Global was hacked last week, with the money unlikely to be recovered. The Japanese firm said on Wednesday that it is carrying out a robust security review and wants to “reassure users that they will not suffer any loss due to the incident”. Many customers have complained that they were not informed directly about the hack and wouldn’t have known about it unless they saw the company’s tweets or read the news.

Are exchanges safe?

Exchanges like Liquid are a vital part of the growing world of cryptocurrency. They are the websites that allow people to buy and sell digital coins like Bitcoin and Ethereum, and a place where many people leave their coins for safekeeping.

However, the safety of exchanges is questionable.

  • Crypto hacker offered a reward after $600m heist
  • Hackers steal nearly $100m in Japan crypto heist
  • The new trick cyber-criminals use to cash out

Earlier this month, another crypto platform called Poly Network was also hacked, and lost $610m of its customers’ funds. Dozens of other hacks against cryptocurrency platforms have seen at least £1.6bn stolen by hackers since 2014.

The largest-ever cryptocurrency hacks

  • BitGrail: $146m was hacked from the Italian exchange in 2018. It’s estimated that 230,000 BitGrail users lost funds.
  • KuCoin: $281m was stolen by suspected North Korean hackers from this attack on the Seychelles-based exchange in 2020. The company recovered most of the funds and refunded customers.
  • MtGox: $450m of mainly Bitcoin was hacked in 2014 which collapsed the Japanese exchange. None of the customers has been reimbursed yet.
  • Coincheck: $534m was stolen in 2018 from the Japanese exchange. Customers were eventually reimbursed.
  • Poly Network: $610m was hacked from the Chinese platform earlier this month in various coins. The hacker returned all the funds and customers have started being reimbursed.

Incidents involving tens of millions, or even hundreds of millions, of dollars, are happening almost every few months and, because these platforms are largely unregulated, there’s no guarantee that customers get their money back.

Source: bbc.com

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