Exchange hacks remain one of the most damaging cybersecurity threats in the cryptocurrency industry, often resulting in millions, or even billions of dollars in stolen assets. These breaches typically exploit security weaknesses in centralized exchanges, vulnerabilities in smart contracts, or even human susceptibility to social engineering tactics.
While data suggests fluctuations in illicit transaction volumes, the evolution of attack methods and high-profile security breaches indicate that crypto-related crime is far from disappearing.
Instead, cybercriminals continue to adapt, employing more sophisticated strategies to bypass security defenses and exploit vulnerabilities within digital asset platforms.
These incidents serve as critical reminders of the ever-present risks in the cryptocurrency ecosystem.
They underscore the importance of implementing robust security measures, both at the platform level and for individual users.
From using multi-signature wallets and hardware security modules to maintaining strict access controls and practicing cybersecurity awareness, every precaution taken can help mitigate the risk of financial loss.
As the industry evolves, so too must security strategies. Continuous advancements in blockchain security, regulatory oversight, and user education will play a crucial role in reducing the impact of exchange hacks in the years to come.
Staying informed and proactive remains the best defense against the persistent threats facing the crypto space.
What Are Exchange Hacks?
Exchange hacks occur when cybercriminals infiltrate centralized cryptocurrency exchanges or personal wallets to steal funds. They exploit security flaws, deceive users with phishing schemes, or leverage insider access to drain digital assets.
Why Are Exchanges Prime Targets?
Leading platforms like Binance, Bybit, and the now-defunct FTX handle billions of dollars in user assets, placing a massive bullseye on their backs for cybercriminals.
Their large transaction volumes and centralized structures make them attractive targets for sophisticated attacks. Similarly, individual crypto wallets, especially hot wallets that remain online, are exposed to threats like phishing, malware, and other forms of cyber intrusion.
Hackers often exploit weaknesses in security infrastructure, software vulnerabilities, or lapses in user vigilance to gain unauthorized access and steal digital assets.
How Hackers Infiltrate Exchanges
Hackers use several techniques to breach exchanges defenses:
- Phishing Attacks: Fake emails, websites, and messages trick users into revealing credentials.
- Compromised API Keys: Stolen API keys allow unauthorized trades, withdrawals, or market manipulation.
- Security Vulnerabilities: Weaknesses in exchange and wallet infrastructure provide entry points for attackers.
- Malware & Insider Threats: Malicious software and compromised employees can facilitate breaches.
- Seed Phrase Theft: Cybercriminals target users who store their recovery phrases insecurely, gaining full control over their wallets.
How To Avoid Being Hacked
Strong security practices can help protect your digital assets from cybercriminals.
The Most Devastating Crypto Scams in History
Some of the largest exchange hacks resulted in billions of dollars in losses. These cases highlight the growing sophistication of cybercriminals and the need for stronger security measures.
Here are some of the biggest crypto scams that shook the industry:
Mt. Gox (2011 & 2014)
Once the largest crypto exchange, Mt. Gox suffered multiple hacks, with the worst occurring in 2014 when 850,000 BTC ($615 million) was stolen.
Despite recovering 200,000 BTC, the loss forced the exchange into bankruptcy, leading to a years-long legal battle to compensate affected users. Mt. Gox was reportedly hacked six times between 2011 and 2014, with the most notorious breach occurring in 2014, ultimately pushing the exchange into insolvency.
The breach was due to weak security measures and lack of proper code maintenance, leading to multiple lawsuits and a drawn-out repayment process for affected users.
Bybit Hack (2025)
The largest crypto exchange scam in history, Bybit suffered a catastrophic breach that led to the loss of $1.4 billion in Ethereum.
Hackers exploited a vulnerability in Bybit’s cold-to-warm wallet transfer system, allowing them to drain funds without detection. According to CoinTelegraph, investigations revealed links to the notorious Lazarus Group, a hacking organization known for targeting financial platforms and using sophisticated laundering techniques.
The stolen assets were quickly funneled through decentralized exchanges and privacy-focused blockchain services, making their recovery nearly impossible. In response, Bybit committed to strengthening its security infrastructure and compensating affected users through its reserve funds.
FTX Collapse (2022)
One of the most shocking and devastating failures in crypto history, FTX was once among the largest and most trusted exchanges before its collapse exposed severe financial mismanagement, fraud, and systemic weaknesses.
The downfall of FTX began when concerns over its financial health led to a massive liquidity crisis, prompting users to withdraw billions in assets. In a matter of days, the exchange was unable to meet withdrawal demands, revealing a deep hole in its balance sheet.
To make matters worse, just hours after filing for bankruptcy, FTX was hit by a $400 million exchange hack, believed to be a SIM swap attack. The exploit targeted administrative access, allowing attackers to drain funds from FTX wallets under the guise of an internal transaction.
This raised further suspicions of an inside job or severe internal security lapses. The hack drained remaining assets from the platform’s wallets, leaving creditors and customers with even fewer chances of recovery.
Investigations revealed that the exchange had allegedly misappropriated user funds for high-risk trading through its sister company, Alameda Research, leading to criminal charges against its founder, Sam Bankman-Fried.
The FTX disaster sent shockwaves throughout the industry, prompting stricter regulatory oversight and renewed discussions about transparency, proof-of-reserves, and stronger security measures in centralized exchanges. The case remains one of the most infamous examples of corporate fraud in crypto and exchange hacks, with legal proceedings and compensation efforts still ongoing.
KuCoin Hack (2020)
In September 2020, KuCoin, a Singapore-based exchange, fell victim to one of the largest cyberattacks in crypto history, losing over $280 million in various cryptocurrencies.
Hackers managed to breach the exchange’s security systems and gain access to its hot wallets, transferring large amounts of Bitcoin, Ethereum, and ERC-20 tokens to unknown addresses.
Upon detecting the breach, KuCoin quickly froze deposits and withdrawals, working closely with blockchain analytics firms and other exchanges to trace and recover the stolen assets.
Their rapid response paid off—within weeks, approximately $236 million worth of funds were successfully recovered, thanks to the cooperation of major blockchain projects that froze or blacklisted stolen tokens.
Further investigations linked the attack to a sophisticated hacking group, possibly state-sponsored.
KuCoin reinforced its security infrastructure after the exchange hack, upgrading its wallet architecture and implementing more stringent risk controls. The attack underscored the vulnerabilities of hot wallets and the importance of rapid incident response in mitigating large-scale breaches.
Binance Exploit (2019)
In May 2019, Binance, one of the largest cryptocurrency exchanges in the world, suffered a major security breach in which attackers stole 7,000 BTC (worth $40 million at the time).
The hackers used a combination of phishing attacks, malware, and compromised API keys to bypass Binance’s security measures.
Once inside, the attackers initiated well-orchestrated transactions that avoided detection by Binance’s security systems. To make matters worse, the breach also allowed hackers to access user data, raising concerns about exchange-wide vulnerabilities.
Binance responded by suspending all withdrawals and deposits, conducting a full security audit, and implementing additional security features, including real-time monitoring and withdrawal whitelist controls.
The attack highlighted the risks associated with API key security and emphasized the need for multi-layered authentication measures.
Binance ultimately covered the losses using its Secure Asset Fund for Users (SAFU), reinforcing trust in the exchange’s ability to respond to cyber threats.
Protect Your Crypto Assets with Security and Control
Scams on centralized exchanges are becoming more frequent. But you don’t need to take unnecessary risks.
Klever offers complete self-custody solutions, giving you full control over your digital assets — with no intermediaries and maximum security.
- Choose the option that best fits your style:
- Klever Wallet App – Secure and convenient. Send, receive, and store your crypto right from your phone.
- Klever Wallet Browser Extension – Connect to dApps, swap assets, and manage your portfolio with ease on your desktop.
- KleverSafe – Offline protection against online threats. The ideal hardware wallet for those who take security seriously.
Your keys. Your coins. Your security.
Don’t wait until it’s too late. Be part of a secure and trusted ecosystem.
Download now or explore each solution to find the one that fits you best.
Stay Safe, Stay Klever!
