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More Exchanges Were Hacked in 2019 Than Ever Before, But Fewer Funds Stolen

Bitcoin Trading Volume Dropped in December on Major Crypto Exchanges
Bitcoin Trading Volume Dropped in December on Major Crypto Exchanges

More cryptocurrency exchanges were hacked in 2019 than ever before, but fewer funds were stolen overall, according to a report from Chainalysis.

11 attacks were recorded last year, but only $283 million stolen overall – nothing compared to the $534 million stolen from Coincheck or $473 million from Mt. Gox from back in 2014, the report notes.

However, the report disclaims some of these numbers by noting that they didn’t focus on thefts where there were no concrete numbers, nor those that were simply “attacks,” as it classifies hacks and attacks as two different issues. That, and it doesn’t include “exit scams” or traders taking advantage of an exchange trading error.

The largest amount stolen was $105 million from Coinbene, and the smallest amount was LocalBitcoins for $27,000. However, note that only a few exchanges had Bitcoin stolen, while the rest were mostly assets in the top five in terms of market cap.

It’s also worth noting that most of these funds are converted into cash right away at another exchange, but small amounts of them are sat on for years as to avoid law enforcement or any other chances of being caught.

However, a rising number of stolen funds are put into a mixer, making them near impossible to track afterward.

While many exchanges are prioritizing security according to the report, there is still some work to be done, considering attacks such as the ones from Lazarus Group.

That said, the report ends by noting that law enforcement agencies around the world are communicating more and more when it comes to these thefts:

“If financial intelligence units (FIUs) around the world can swiftly share the information they get from exchanges upon being hacked, they may be able to freeze funds before hackers are able to move them to a mixer or low-KYC exchange.”

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