Largest cryptocurrency hack

Largest cryptocurrency hack
The Mt. Gox Hack
450,000,000 US dollar(s)
February 2014

The largest hack of a cryptocurrency exchange was the Mt. Gox hack, which was publicly disclosed in February 2014. Hackers managed to breach the security of what was then the world's largest Bitcoin exchange, transferring out 850,000 bitcoin belonging to the Japan-based Mt. Gox and its customers. At the time of the hack, the stolen bitcoin had a value of around $450 million (£270 million).

It is worth noting that this was what's called an "off-chain" hack. The security of the blockchain (i.e., on-chain) that verifies and confirms bitcoin transactions is not practicably hackable using any known technique or technology. Instead, the hackers gained access to the hot wallet keys used to secure Mt. Gox's various bitcoin wallets and used those credentials to transfer the bitcoins to anonymously held wallets they controlled.

Exchanges like Mt. Gox act like banks, holding bitcoin in their wallets on behalf of customers that do not want the hassle of maintaining a wallet of their own. This means that while the customers owned the bitcoin they had purchased on Mt. Gox trading platform, unless they had moved it to their own cold wallet (outside of the exchange), Mt. Gox remained the registered owner on the blockchain of these bitcoins. Hacking into a centralized crypto exchange like Mt. Gox, is like hacking to the accounts of customers of a bank. Mt. Gox's staff interpreted the draining of customer accounts as those customers moving their holdings to more secure personal wallets, and so did not raise the alarm until it was too late.