Vera Thornpike

Top 3 Biggest Bitcoin Hacks and Frauds in History

What’s the biggest Bitcoin hack in history? How did Bitcoin hackers manage to steal millions of dollars from investors? How can you prevent having your Bitcoin hacked?
Top 3 Biggest Bitcoin Hacks and Frauds in History

During the 10 years of its existence, Bitcoin has made waves and has grown in price tremendously, peaking to $20,000 in December. Potential investors couldn’t stay indifferent – all in all, Bitcoin has become one of the most profitable assets ever. However, high profits are always associated with high risks and frauds. Has Bitcoin ever been hacked? Yes! Despite the fact that blockchain is a highly secure technology, digital fraudsters invent new ways of disrupting the system.

Here are the biggest Bitcoin hacks that took place recently.

Bitcoin Savings and Trust

This is the biggest and the cruelest Bitcoin hack ever. The company performed a classic Ponzi scheme: it attracted Bitcoin investors by promising them 7% profit per week, which would result in 365% in a year. It gathered 500,000 BTC before disappearing in August 2012.

Enraged investors managed to sue the company, and a year after, the judge ordered Tendon Shavers, its founder, refund the investors over $40 mln. In 2012, the sum of fraud equaled $6 mln, but in a year it grew to $500 mln because the BTC price was about $100. Turns out, the organizer still managed to make big money even after paying reparations.

Mt. Gox: Bitcoin Hacked Twice!

This Bitcoin exchange based in Japan has a notorious reputation due to being hacked twice – in 2011 and 2014. That’s a rare occasion: no other exchange website suffered from Bitcoin hackers twice. The platform started operating in 2010 and quickly made its way to the top. But in a year, everything changed.

In June 2011, a security breach of the website allowed hackers to drop the price of BTC to $0.01. Then they used a compromised computer belonging to a Mt. Gox auditor to steal a huge amount of Bitcoins. As soon as the transfer was finished, the initial BTC price was restored. The operation took a few minutes only and cost Mt. Gox $8,750,000 back then.

Mt. Gox is the number one BTC failure ever
Mt. Gox – one of the biggest Bitcoin hacks in history


Bitcoin got hacked again in February 2014, when the platform was the biggest Bitcoin exchange and processed about 70% of Bitcoin transactions. Hackers caused technical issues on the Mt. Gox website, and it was suspended for one month. That made Bitcoin’s price fall by 36%: it made Mt. Gox lose about 850,000 BTC after the attack, which equaled $473 back then. After this cryptocurrency collapse, the company had to declare itself bankrupt.

Investors lost their money and did not receive any refunds.


Although Bitfinex is one of the largest cryptocurrency trading exchanges on the market, it also has had problems in the past. In August 2016, hackers attacked the platform by using the vulnerability of its Multisig wallet architecture and stole 120,000 BTC. Because of this hack, Bitcoin dropped in price from $607 to $515 in a few hours.  Luckily for traders, the company refunded almost the whole sum using its BFX tokens exchanged for USD.

Estimated to be worth $72 mln, this is the second biggest Bitcoin exchange breach after Mt. Gox.

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Other notorious cases

Mt. Gox, Bitcoinica, and Bitfinex aren’t the only exchanges to have had Bitcoin hacked. Here are some other cases in point.

How was Poloniex hacked?

Another biggest cryptocurrency exchange platform, Poloniex, was hacked in 2014. The company didn’t disclose the exact number of coins lost, but a more detailed explanation of this BTC hack was posted on the Bitcointalk forum.

How did the Bitcoin hacker manage to do that? It was simple: hackers exploited the faulty withdrawal code of Poloniex. In comparison with Mt. Gox’s accident, no other Bitcoin hacking seems to be so terrible. However, the outcomes affected all Poloniex users.

Soon after the attack, the platform suspended all operations temporarily and declared on its forum that funds of all Poloniex users would be reduced by 12.3% of all BTCs (97 BTC). It was done to protect users: had all customers withdrawn their funds altogether, there would be nothing left for the rest 12.3% of traders. Eventually, those who lost their money were repaid by the company – it was verified by the customers.

Hackers attack Poloniex quite frequently
Poloniex often becomes the target of hackers, but most attacks are mitigated successfully


The rumor goes that another Poloniex hack took place in 2017, but the official representatives did not confirm that. Even if the Bitcoin hack did occur, Poloniex continues delivering a sufficient level of service quality.

Bitcoinica: 61,000 Bitcoins hacked

This platform was attacked in March 2012, when Bitcoin was about $5, so the total loss was about $215,000.

Hackers found a vulnerability in the shared online web host Linode and managed to steal about 46,700 Bitcoins from Linode users. The majority of the funds (43,000 BTC) was stored in Bitcoinica exchange platform.

The second attack on Bitcoinica was made 2 months later: hackers stole 18,000 BTC. That finally sank the company and it declared itself bankrupt.

Bitstamp: hacked but recovered

The Slovenian-based startup was established in 2011 to be a safer alternative to Mt. Gox. However, it appeared to be a poor alternative because of the Bitstamp hack that took place in 2015. An anonymous hacker stole 19,000 bitcoins (worth of $5 million) from Bitstamp’s operational hot wallet.

After that, the company suspended its operations and posted the following notice:

The statement of Bitstamp’s representative after hacking
That’s what Bitstamp users received after hack

Today, Bitstamp still operates and even managed to get back some of its previous users. After the attack, it took drastic measures to boost security, including the introduction of BitGo multisig wallets for operational purposes.


This cryptocurrency exchange platform was hacked in 2012: hackers accessed unencrypted private keys that were stored online for backups. At that time, loss of 24,000 BTC wasn't dramatic, and the company managed to refund customers. However, it closed soon due to regulatory measures, as the founder stated in 2013.

Here’s a breakdown of Bitcoin hacks taking place throughout the history of its existence:

Breakdown of Bitcoin hacks
Bitcoin hack, minor and major


How to avoid a Bitcoin hack?

All of the above-mentioned cases show that mostly those exchange platforms are to blame for the financial loss; security breaches are found at the application level. The blockchain itself is failure-proof, but the websites where transactions take place rely on different programming languages and technologies. Does it mean you cannot prevent Bitcoin fraud?

No, but you can protect your digital assets in the following way:

  • Register on reliable and trustworthy platforms only. Read customer reviews, visit forums - find information about the digital security of platforms and their history. 

  • Find out which security measures are taken by the exchange platform: SSL encryption, multisig wallet, and other high-grade technologies are important for keeping website secure.

  • Store your cryptocurrency on a cold wallet. This is a piece of hardware that ensures rock-solid protection of digital funds because the private keys are available for the wallet owner only. It looks like a USB drive and doesn’t take much place – you can access your funds anytime and anywhere using your PC. Nobody can hack a Bitcoin wallet that’s not accessible online.

  • Don’t perform cryptocurrency transactions via public Wi-Fi and insecure connections – your traffic and, consequently, wallet address, can be compromised this way.

  • Do not let anyone know your private keys and login credentials. Don’t set this information on social messengers and email.

  • Whenever you copy and paste the Bitcoin wallet address, double check its correctness. There's a malware that can alter the wallet number when you paste it in the wallet field during transactions. If your device gets ‘infected’ with such malware, you will send cryptocurrency to hackers instead without being aware of it.

  • Set up 2-step authentication on your account. Use the solution from Google or AUTHY application. Such practice usually means an SMS confirmation of login. This way, you will know whenever someone attempts to access your account.

Cold wallet – bulletproof protection of crypto assets
With a cold wallet, your crypto savings will be safe & sound


Bottom Line

Can Bitcoin be hacked? These examples show that everything is possible: unsleeping hackers keep finding new ways of compromising the security of crypto exchanges and the PCs of investors. As soon as developers detect vulnerability and eliminate them, malicious programmers find out how to hack Bitcoin in a different way. Therefore, you should always be on the guard.

Bitcoin is not just a good investment opportunity - it's bait for investors that is masterly used by cybercriminals. Don't let anyone steal your hard-earned Bitcoins – take all possible security measures and don't mess up with such exchange platforms as mentioned above.

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Why Do Banks Still Hold Bitcoin’s Puppet Strings?

Cryptocurrency is supposed to be putting the final nail in bank’s coffins, and yet the market jumps and falls on any announcement from the likes of Goldman
Why Do Banks Still Hold Bitcoin’s Puppet Strings?


There is little doubting that Bitcoin, and by extension, all cryptocurrencies, are heavily affected by the institutionalized investor and banking model. Cryptocurrencies have encompassed a lot of different facets of society, and one of the major ones is finance and investment.

This means that a big, and powerful, sect of society is sitting on the fence about Bitcoin and its potential- traditional investors. These traditional investors will be the next big wave of adoption, but they are still mostly skeptical as they wait to see how regulators, governments, and legislators deal with this digital currency.

It means that the powerhouses of institutionalized investors, banks and other major financial institutions, are the gateway for this flood of adoption, but it also means that their decisions in dealing with cryptocurrencies affect the investors, and thus effects Bitcoin heavily.

It is as ironic as when Bitcoin was created, its aim was to offer an alternative to the centralized banking model. People were meant to be handed back the power and banks were supposed to fear Bitcoin as the next revolution in finance that would make them obsolete.

Now, what has transpired is the biggest of banks can make one small decision and the entire cryptocurrency market falls or flies.

Goldman’s market sinking move?

Yesterday, the cryptocurrency market suddenly took a sharp and unexpected drop as Bitcoin fell almost five percent in less than an hour. It affected the entire market which was previous to this, showing good and steady gains.

At the time, no one really had an answer for the sudden drop, but a few commentators have come out and pinned the drop to a decision from Goldman Sachs. The Wall Street Bank has deceased to backtrack on its decision to launch a trading desk, citing legal concerns.

Since then, Bitcoin has fallen as low as $6,200- a loss of over $1,000 in less than 24 hours. But is Goldman’s decision really to blame for this?

There is no doubting that banks, especially on the scale of Wall Street giants, have an effect on the price of cryptocurrency as they are building hype about the potential that they will test out the waters of Bitcoin.

There are instances of where Goldman has been linked to cryptocurrency through other companies which they control, such as Circle, but they have yet to take the plunge. It also comes off the back of a period where major banks laughed off Blockchain and Bitcoin.

JP Morgan and their head Jamie Dimon have had a bipolar relationship with Bitcoin since Dimon called it a fraud last year. So, as these banks keep mulling over offering Bitcoin, and thus opening the floodgates to a lot of money for the market, they are building a lot of hype.

The hype bubble

This excitement and anticipation has been personified recently with the potential of a Bitcoin ETF in the offing. The idea being that should an ETF be approved by the SEC, the entry into the cryptocurrency market by some big Wall Street players would be massive.

The hype around this has been tangibly felt though as first, in the lead up to a potential positive decision by the SEC, Bitcoin steadily rose above $8,000, and when the decisions were either delayed or denied, the price collapsed to almost a new year-long low.

Still, the ebbing and flowing continue as the institutionalized banks, and financial institutions, take their time in deciding whether to jump headlong into the market or not. This in itself is handing more power of the market to the banks as they keep the rest of the market on tenterhooks.

Naeem Aslam, Chief Market Analyst at ThinkMarkets, believes that this hype is being fueled by the likes of Goldman, although the bank is just doing what it would do in any case.

“I have openly talked about one thing many conferences- there is no doubt that the Bitcoin price is supported by this hype that institutional banks are going to get involved. Of course, Goldman Sachs sits on the top of this ladder, and my concern has been what if Goldman Sachs says that it wants to review its plans of getting involved in the crypto market? Goldman’s initial announcement to get involved in this cryptocurrency market provided a lot of support for investors and the spillover effect also attracted several other major tier-one banks,” Aslam said.  

An asset game

What this reliance on institutionalized banks means for the cryptocurrency market is that it is still heavily seen as an asset first- more than a currency or a technology. This may not be the case forever, but as the nascent technology finds its place in the world, it is exploring the asset-class first.

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France Eases Taxes on Bitcoin Profits

French parliament backed plans to lower taxes on Bitcoin sales to match the rest of the country’s capital gains taxes
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On Wednesday, Nov. 7, the financial commission of France’s lower house of parliament backed plans to lower taxes on Bitcoin sales to match the rest of the country’s capital gains taxes. The current Bitcoin tax is 36.2% and once the amendment becomes law, the new rate will become 30%. This is definitely beneficial to Bitcoin in the long run, but we don’t expect to see huge moves right away.

Charts at a Glance


BTC/USD is trading at 6475 at the time of writing, with a 2.00% gain for the last 7 days and slightly negative for the last 24 hours. After reaching a high at 6540, the price retraced into the recently broken level (6465) and seems poised for a new climb.

The pair is showing higher highs and higher lows, so we can consider this a mini-uptrend, albeit from a longer-term perspective, BTC is ranging without a clear direction. As long as the bullish trend line seen on the chart remains intact, our bias is bullish, anticipating a move above the previous high at 6540.

Support zone: 6465 followed by the bullish trend line seen on chart

Resistance zone: previous high at 6540

Most likely scenario: bounce from the current level, through 6540

Alternate scenario: move lower into the bullish trend line

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The ‘Blockchain Over Bitcoin’ Narrative- Can They be Separated?

There are those who like Bitcoin and Blockchain, and then there is a growing number who like them as separate entities, but can they be split?
The ‘Blockchain Over Bitcoin’ Narrative- Can They be Separated?

Since Bitcoin emerged, as the first showing of Blockchain technology, people have marveled at its revolutionary capabilities. It is a technology that is decentralized, immutable, anonymous, and a distributed ledger, all of these things make it applicable in a number of sectors.

This has led to a form of separation developing as many focus in on the power of Blockchain technology, and separate it from the likes of Bitcoin and other cryptocurrencies. However, the idea of separating Bitcoin from Blockchain is fundamentally difficult, yet there is a drive, especially from institutionalized entities like banks and regulators, to try and make this separation in the name of control.

China is a prime example of this as they have even gone as so far as to ban cryptocurrencies, yet have implemented Blockchain in their five-year plan. However, this idea of separating Bitcoin from Blockchain is creating something that is at its core different from the ideal of what was envisaged for this technology.

To separate Bitcoin and Blockchain is to defeat the ends of decentralization and financial freedom, yet, that does not mean it is impossible, and it is already starting to happen.

No separation

For those who have found themselves involved in the cryptocurrency space for some time now, and even from the humble beginnings of Bitcoin, they will understand that it is impossible to choose Blockchain without Bitcoin.

The separation of Blockchain from cryptocurrency has only manifested as more institutionalized and mainstream sectors have entered the market.

CEO of Lightning Labs, the developer of the Lightning Blockchain scalability protocol, Elizabeth Stark, has said how this narrative of Blockchain over Bitcoin has emerged recently.

“When we first pitched my company Lightning Labs, we actually took the word ‘Bitcoin’ out of our deck and our marketing material because it was so much about Blockchain. Now, I feel like we’ve entered into a ‘Bitcoin, not Blockchain’ world, where people understand the value of cryptocurrency technology and what these can bring. You also have proof of work in Bitcoin, you have the public/private key cryptography. There are other things that make Bitcoin special. Somehow, the Blockchain part got separated and became a thing,” she said.

For one’s own gain

However, despite this general understanding that cryptocurrency and Blockchain are interlinked, there have been some jarring instances where companies and people have forged headlong with Blockchain while trying to cut out the cryptocurrency side of things.

JP Morgan is a prime example of this. Their CEO, Jamie Dimon, famously once called Bitcoin a fraud and has been barraging the cryptocurrency space for some time. However, at the same time, his company has also been creating its own Blockchain- Quorum- as a way to understand the space and embrace its potential.

From PayPal to MasterCard and even the World Bank, all of these institutions have pushed the Blockchain over Bitcoin narrative, and although it seems flawed, they might be getting at something which is entirely new.

The fundamentals

The issue is, Bitcoin is the product of Blockchain fundamentals. It is decentralized, immutable, transparent and anonymous, this is what Bitcoin is because that is what Blockchain offers. However, Blockchain is so diverse and disruptive, it can be used and molded to fit into a number of solutions.

These solutions are what is exciting banks and regulators, and even governments, but they do not like the trutless, not controlled, a decentralized facet of the space. This is why these entities are trying to make blockchain their own, with private chains and patents, so that there is control.

A Chinese example

In fact, the example of how China has treated Cryptocurrency compared to how it has treated Blockchain is a perfect example. The socialist republic has, in no uncertain terms, banned cryptocurrencies from its border and tried to quash them totally.

However, at the same time, their president has included a five-year plan, and the state-sponsored TV channel, CCTV, has said that Blockchain is 10 times more important than the Internet.

Essentially, what the institutionalized entities and the likes of Chain are doing is creating a new space that is moving away from the original principles of what Blockchain was supposed to mean. That does not necessarily mean they are right or will get it right, but it is a sign of the times.

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From Russia with Love: Moscow's Affair with the Blockchain

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Most people know that Russia is the biggest country in the world by size, a major political player on the world stage, and a country with huge reserves of timber, oil, and natural gas.

Fewer know that Russia is now also becoming ever more involved in the world of Blockchain and cryptocurrencies; in fact, it is believed that most programmers who work on the Blockchain today speak Russian in addition to English and Chinese.

To top it off, Russia has now also become home to many international crypto events, such as the Blockchain Life forum held in St Petersburg.


Statistics from this year, corroborated by the Russian Association of Crypto Industry and Blockchain (RACIB), show that more and more companies in Russia are doing mining: the numbers have grown by around 17% this year taking the total number of mining companies in Russia ― the ones that have been accounted for ― to around 80 000.

According to many fintech specialists, Russia, particularly the Eastern region of the country known as Siberia, is an ideal place for mining because of its abundance of mining resources, namely inexpensive electricity.

This must have something to do with the fact that today, as some sources claim, around 3 million individuals own cryptocurrencies in Russia against 2.5 million individuals from last year. The crypto figures are said to be growing.

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One of the top crypto exchanges in the world, Singapore-based Huobi has recently moved in to conquer the Russian market. Although those who trade cryptocurrencies in Russia are no strangers to exchange platforms, Huobi is the first platform to have an actual office in Russia with a Russian-speaking call centre. According to those much satisfied, this is one of the key features Huobi has to offer that no other platform currently has, i.e. ease of real-time client to representative communication in Russian, which has long been overdue.

Huobi’s phone app

The new office opened in Moscow at the start of last week. While at present deposits in Russian roubles are not permitted due to regulatory reasons, those who wish to trade will be able to buy cryptocurrencies using roubles and have them put in trading accounts via Huobi’s OTC service. Moreover, Huobi will also offer loans to potential  miners to purchase mining equipment, an important additional service which is to be made available in early 2019.

To make their intentions even more recognizable, Huobi will also be training its future specialists at the Department of Entrepreneurship and Logistics in Moscow’s Plekhanov University of Economics.

LocalBitcoins and Other Players

Helsinki-based LocalBitcoins is one of the most popular Bitcoin to local fiat currency exchange platforms. What is fascinating to learn is that the Bitcoin to Russian Rouble exchange pair is actually the most popular one of all, trading at close to 2 million USD every day: all that despite the Russian government’s ongoing ban of access to the LocalBitcoins domain since 2016.

A LocalBitcoins ATM

Not only does it show that the BTC-RUB trade is strong and plentiful, but also that the crypto traders and owners in Russia have moved way past any government-imposed web regulations in technological terms.

But this is not all. According to independent sources, some places in Moscow exchange cryptocurrencies for roubles in numbers totalling close to 9 billion USD, which is five times LocalBitcoins’ turnover. Among such places are believed to be the large shopping centres “Moskva”, “Sadovod”, and “Food City”.

One of the entrances to the “Sadovod” shopping centre in Moscow


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Another solution has been found for the implementation of my plan to transfer production to space and create an orbital city. The details are below.

Actual web is a gem technology

It is common knowledge that spiders are fine weavers.

The thread that spiders produce has unique characteristics fully adapted for hunting. It is durable for its thickness, sticky, elastic and perfectly forms a network without any knots or additional fasteners. Now, for example, Japanese scientists are experimenting with some species of spiders, using genetic engineering, in order to get the most durable natural fiber. Carbon nanotubes are interwoven into this fiber to create a completely new quality- this "rope" is almost impossible to break. The ratio of the cross-section of the filament to the force applied to the break has no analogs in the modern world. These developments have not yet been put to practical use which is necessary for mass production, but scientists, as they say, are on the home stretch.

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Not only has the web itself prompted scientists new technical analogies with the arachnoid species- the spider, developing a thread, moves on a web, making circular and radial movements. The carriage of the inkjet printer, where the cartridge is installed, moves in the same way, but only within the limits of the size of the device. Currently, 3D printers are very static devices.

What if we make the printer move in space and create extended 3D structures? This would be a great solution for outer space!

Then there would be no need to transport parts from Earth and their installation by astronauts to outer space. Another important point is the absence of seams or other joints that affect the rigidity of the structure.

It is these considerations that prompted the developers of Tethers Unlimited to create an arachnoid-like robot-3D printer SpiderFab. It's amazing how much this robot look resembles a spider! It has four limbs, each of which is a separate printer (the developers are going to increase the number of "legs"), the inflated "abdomen" is a container with the material for printing. Also, the robot has an autonomous power plant with a solar array for constant recharging. The robot will be able to move in the process of printing and create frame structures in the image and likeness of natural cobwebs.

The introduction of such a robot will solve the global problem- the creation of objects in space with such dimensions that the present state of technological development is not yet capable of. As I wrote above, the expensive delivery of parts and elements from the Earth will no longer be necessary. Also, all the "delights" of space mining will be revealed, when the elements extracted on asteroids and planets will be used. Space materials researched will allow creating such composites for printing, which were not possible under terrestrial conditions. Such a printer will be able to print any complex object in orbit, from a part or a spare part to gigantic stations. This would lead to materials being in abundance!

And now imagine a whole fleet of cosmic "spiders" that weave in the high orbit of the Earth an openwork skeleton of a giant object, in the near future finding the outlines of a space city... And this is no longer a dream!

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