South Florida Criminal Defense Lawyer Blog
Consumer interest in cryptocurrency spiked in 2021, with $100’s of billions in total sales taking place. To compensate for this spike in interest, cryptocurrency trading networks and platforms have grown in popularity, allowing consumers to easily buy and sell cryptocurrencies.
Unfortunately, this rapid growth in the cryptocurrency industry has led to vulnerabilities in the platforms. Hackers have taken notice of these vulnerabilities and started taking advantage by launching increasingly sophisticated attacks. As a result, over $1 billion dollars was compromised or stolen from cryptocurrency trading platforms in 2021.
Biggest Cryptocurrency Hacks of 2021
Poly Network – $611 million
In August, the popular crypto platform Poly Network was hacked, resulting in the largest cryptocurrency exploit of all time.
Over $600 million in assets were stolen from the blockchain platform, including: $264 million worth of assets from Ethereum wallets, $250 million from Binance Smart Chain wallets, and $85 million from Polygon.
The fallout from this cryptocurrency heist proved to be an example of comradery throughout the crypto industry. After the hack, crypto users and platforms partnered together to ensure the stolen funds could not be used or laundered by the hackers. Shortly after, the hackers willingly returned over $260 million in stolen funders after being pressured by security firms.
Poly Network later offered the hacker a role as Chief Securities Adviser, before he returned the entirety of his stolen bounty.
BitMart – $196 million
In December, BitMart was hacked, resulting in significant losses from the platform’s Ethereum and BSC wallets.
This hack resulted in losses mostly in memecoins, utilized for their high-risk, high-reward investment opportunities.
BitMart CEO Sheldon Xia confirmed that this security breach took place, but little is known about who performed the heist or what caused the exploit.
Cream Finance – $148 million
Popular DeFi platform Cream Finance was hacked twice in 2021. In August, hackers managed to exploit $18 million from the company, before a significantly larger sum of $130 million was stolen in October.
The August hack was a result of smart contract issues, while the second hacker took advantage of “flash loans,” allowing him to lend and borrow funds across multiple wallets, without issuing collateral. The hacker managed to get away with more than 2,760 Ethereum and 76 Bitcoin.
Vulcan Forged – $140 million
Vulcan Forged is a mobile game in which users play the game to earn NFT. In December, the game had $140 million worth of PYR tokens stolen from user’s wallets.
The hack resulted in the private keys of 96 addresses being compromised, allowing the hacker to drain the entirety of some user’s wallets.
While the hacker was never caught, the Vulcan Forged team reimbursed all exploited users.
Badger Finance – $120 million
In December, BadgerDAO was exploited, seeing more than $120 million in Ethereum and Bitcoin stolen from the platform and its users.
Hackers too advantage of vulnerabilities in the smart contract system, allowing them to send user funds directly into their own wallet.
Cryptocurrency Arrests
As governments look to crack down on this type of activity, individuals both innocent and guilty will be arrested for cryptocurrency – related offenses. If you were arrested, or are being investigated for a crypto-related crime in Miami or South Florida, contact a criminal defense attorney with experience handling complicated cryptocurrency matters.