The three recent crypto attacks and hacks that you must know

Because hot wallets are linked to the internet, they are quite vulnerable to theft. Hot wallets of major cryptocurrency exchanges have been compromised for millions of dollars over the years. In 2019, a hacker gained access to Binance’s hot wallet and stole $41 million in merchandise. Similarly, in 2019, hackers broke into South Korean exchange Bithumb’s hot wallet and stole $13.4 million.

Hacks are nothing new to DeFi projects. The financial vertical of the crypto sector is teeming with hundreds of thousands of apps worth billions of dollars. However, the sector is tainted by faulty codes, network flaws, and lax security, which hackers frequently exploit.

Recently, Terraport Finance, a decentralized exchange that allows token swapping on the Terra Classic blockchain, became the latest DeFi project to be hacked. On April 10, Terraport said that a hacker gained access to the protocol and drained all of its liquidity pools, stealing about $2 million worth of virtual assets.

With the help of on-chain trackers, many social media handles claimed that the stolen funds were transferred to Binance and MEXC Global. Meanwhile, the said exchanges have been notified to freeze the assets before the attacker can withdraw the funds.

In another unrelated DeFi exploit, SushiSwap, the 26^th largest decentralised exchange by market capitalization, suffered a loss of $3.3 million due to a bug on its smart contract. As per blockchain security firm PeckShield, the bug appeared on the smart contract Route Processor2, which is used to route trade orders. Meanwhile, according to other reports, the smart contract was launched by a hacker and did not execute authentication checks, allowing the hacker to steal $1,800 in ETH from a single SushiSwap user. At this time, it is unclear whether the contract bug was intentional.

This is not the first time a lapse in a smart contract has led to major losses. In 2016, a hacker discovered a flaw in The DAO, a smart contract on the Ethereum blockchain. The bug allowed the attacker to continuously request that the smart contract deliver money to them, resulting in the theft of 3.6 million ETH, which was then worth over $70 million.

Hacks and network exploits continue to plague the crypto sector. In 2022, hackers stole nearly $4 billion worth of virtual assets. In it, DeFi projects accounted for about 82 percent, or $3.1 billion. Until security measures are enhanced, those investing in crypto projects must run extensive checks to safeguard their investments. It is also recommended that one sets up a cold storage wallet to park their crypto assets rather than park them in centralised exchanges.