The Bybit Incident and the Five Largest Crypto Hacks in History (Excluding Bybit)

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In recent days, we have provided in-depth tracking reports and a comprehensive timeline breakdown of the Bybit hack. However, in the crypto space, hacks and scams are unfortunately not uncommon, casting a shadow of legitimacy and security concerns over the industry. That being said, as Chainalysis data indicates, the growth rate of legitimate use cases for cryptocurrency far outpaces illicit activities.

Nonetheless, the increasing sophistication of hackers in recent years cannot be ignored, especially as the crypto market continues to expand. According to Crystal Intelligence, by mid-2024, the cumulative amount stolen from crypto-related hacks had already reached $19 billion.

This article will review the five largest cryptocurrency hacks in history, second only to the Bybit incident, shedding light on the stories behind these attacks and their lasting impact on the crypto industry.

1. The Mt. Gox Hack (2014)

Undoubtedly, the Mt. Gox hack remains one of the most infamous attacks in crypto history. In February 2014, Japan’s largest Bitcoin exchange, Mt. Gox, suddenly declared bankruptcy, revealing that approximately 850,000 BTC (valued at around $450 million at the time) had been stolen. This incident was not just a single hack — it exposed severe vulnerabilities in crypto exchange security, fund management, and regulatory oversight.

Background & Impact:

At its peak, Mt. Gox handled over 70% of all global Bitcoin transactions. However, due to internal security flaws, poor management practices, and a lack of transparency in fund handling, the platform ultimately fell victim to a historic theft. Even years later, the sheer scale of the lost Bitcoin remains staggering, deepening the trust crisis within the cryptocurrency industry.

Although some of the stolen funds were later recovered, the Mt. Gox case remains a cautionary tale, pushing exchanges to enhance security measures and driving global calls for stricter exchange regulations.

2. The Coincheck Hack (2018)

In January 2018, Japanese crypto exchange Coincheck suffered one of the largest thefts in history when hackers stole approximately $530 million worth of NEM tokens (roughly 500 million NEM coins). This incident became the largest crypto heist in Japan’s history.

Background & Impact:

Unlike the Mt. Gox hack, which targeted Bitcoin, Coincheck’s breach involved the theft of NEM tokens. The attackers exploited vulnerabilities in the exchange’s hot wallet (an online storage wallet) and drained all the stored NEM. Although Coincheck later reimbursed a portion of customer funds, the event severely damaged public trust in exchange security.

Long-Term Consequences:

This attack prompted Japan’s financial regulators to impose stricter oversight on crypto exchanges. It also spurred other global governments to reassess and tighten regulatory measures related to fund security, reserve management, and compliance requirements for crypto trading platforms.

3. The Bitfinex Hack (2016)

In August 2016, Bitfinex, then the world’s third-largest cryptocurrency exchange, suffered a major breach, losing approximately 120,000 BTC (valued at $70 million at the time). The attack exploited vulnerabilities in Bitfinex’s multi-signature wallets, allowing hackers to bypass security protocols and steal a massive sum.

Background & Impact:

Following the hack, Bitfinex suspended all Bitcoin withdrawals and initiated emergency security protocols to prevent further losses. However, much of the stolen BTC was never recovered. The exchange worked with law enforcement agencies and implemented a redesigned security system while issuing new tokens to compensate affected users.

Long-Term Consequences:

This event served as yet another reminder that security must remain a top priority for crypto exchanges, especially regarding multi-signature wallet management. The Bitfinex hack also marked a turning point in industry-wide efforts to improve security and regulatory compliance for trading platforms.

4. The Ethereum DAO Hack (2016)

Although not a conventional exchange hack, the Ethereum DAO attack remains one of the most significant hacks in crypto history. In June 2016, a hacker exploited a vulnerability in the DAO smart contract, draining over 50 million ETH (then valued at over $150 million). This incident became Ethereum’s most severe security breach and led to a major split in the Ethereum community.

Background & Impact:

The DAO (Decentralized Autonomous Organization) was a pioneering decentralized investment fund built on Ethereum. The hacker exploited a flaw in the contract’s code, siphoning off a large portion of funds from the DAO’s treasury. Although this was not an attack on Ethereum itself, it exposed the risks inherent in smart contract security.

To address the crisis, the Ethereum community voted to execute a hard fork, effectively reversing the hack’s effects. However, this decision led to significant controversy and ultimately resulted in the split between Ethereum (ETH) and Ethereum Classic (ETC).

Long-Term Consequences:

The DAO incident highlighted critical security challenges in blockchain governance and smart contract development. It remains a fundamental case study on the importance of rigorous code auditing and security best practices for decentralized applications.

5. The KuCoin Hack (2020)

In September 2020, crypto exchange KuCoin suffered a massive security breach when hackers exploited vulnerabilities in its hot wallets, stealing approximately $200 million worth of digital assets. The stolen funds included major cryptocurrencies like Bitcoin and Ethereum, as well as a wide range of altcoins and DeFi tokens.

Background & Impact:

The KuCoin hack sent shockwaves through the market. While the exchange quickly responded by halting trading and working with affected projects, the breach raised significant concerns about the security of hot wallet storage. KuCoin later announced that it would compensate users and that a majority of the stolen funds were eventually recovered through blockchain tracing.

Long-Term Consequences:

This attack underscored the persistent risks of cross-border crypto transactions and exchange security. It also reinforced the importance of incorporating advanced multi-factor authentication, cold storage solutions, and enhanced security protocols.

Conclusion: The Ongoing Battle for Crypto Security

From Mt. Gox to Bybit, hacker attacks have remained one of the most pressing challenges facing the cryptocurrency industry. As the market continues to evolve, security concerns have become central to the industry’s long-term viability. While crypto has introduced groundbreaking financial innovations, the need to strike a balance between innovation and security remains a global challenge for regulators, developers, and investors alike.

The Bybit incident has once again put crypto exchange security under intense scrutiny. While the industry’s future remains promising, strengthening security measures, implementing effective regulatory frameworks, and fostering innovation will require a concerted effort from all stakeholders worldwide. Going forward, enhancing digital asset protection and fortifying exchange security will play a crucial role in determining the sustainability of the crypto sector.