Arab Press

بالشعب و للشعب
Sunday, Jul 06, 2025

The real victims of mass crypto-hacks that keep happening

The real victims of mass crypto-hacks that keep happening

Taxi driver Chris is obsessively checking his phone for updates.

"I'm set to lose almost 2,500 euros (£2,100) worth of cryptocurrency coins," he says.

Chris describes himself as "a small crypto-holder from Austria" and is one of many victims of a hack attack on cryptocurrency exchange Liquid Global last week.

The company has insisted it will pay all customers who lost out in the $100m (£72.8m) attack.

But until they get the money back, many customers are worried.

Every time 38-year-old Chris picks up a customer in his ageing Volkswagen, he's reminded of what's at stake.

"My car is more than 20 years old and I could have bought a new used car with that money," says Chris. "It's not catastrophic, but still quite a sum for me. I need at least one year to save that sum."

According to the UK's Financial Conduct Authority, there are now 2.3 million cryptocurrency investors in the UK alone, up from 1.9 million last year.
'My stress is at eight out of 10'


In Indonesia, 27-year-old Dina says she is in shock. "I'm feeling so angry with the hackers, and I'm feeling stress for myself. I have around $30,000 and I need that money to live on. I'm just a housewife trying to make money from crypto."

At the other end of the scale, a 42-year-old Norwegian doctor says he is struggling to concentrate, because he could lose a fortune that he's watched grow over the years.

"My Liquid balance is 969,000 euros. It's extremely worrying to me and my stress is at eight out of 10. I'm always thinking about it."

Panicked parents


In Sydney, James describes the stress the hack has put on his parents, who managed to cash out at a loss before the company blocked transactions.

"My mum and dad had one Bitcoin on there, so about 70,000 Australian dollars (£37,000). It was, and is, a lot of money to them.

"There's obviously stress created. At first they had no idea what was happening, then they felt they were basically forced to sell in a panic and withdraw which means they lost about A$10,000."

Liquid Global was hacked last week, with the money unlikely to be recovered.

The Japanese firm said on Wednesday that it is carrying out a robust security review and wants to "reassure users that they will not suffer any loss due to the incident".

Many customers have complained that they were not informed directly about the hack and wouldn't have known about it unless they saw the company's tweets or read the news.

Are exchanges safe?


Exchanges like Liquid are a vital part of the growing world of cryptocurrency. They are the websites that allow people to buy and sell digital coins like Bitcoin and Ethereum, and a place where many people leave their coins for safekeeping.

However, the safety of exchanges is questionable.

Earlier this month, another crypto platform called Poly Network was also hacked, and lost $610m of its customers' funds.

Dozens of other hacks against cryptocurrency platforms have seen at least £1.6bn stolen by hackers since 2014.

The largest-ever cryptocurrency hacks


*  BitGrail: $146m was hacked from the Italian exchange in 2018. It's estimated that 230,000 BitGrail users lost funds.
*  KuCoin: $281m was stolen by suspected North Korean hackers from this attack on the Seychelles-based exchange in 2020. The company recovered most of the funds and refunded customers.
*  MtGox: $450m of mainly Bitcoin was hacked in 2014 which collapsed the Japanese exchange. None of the customers have been reimbursed yet.
*  Coincheck: $534m was stolen in 2018 from the Japanese exchange. Customers were eventually reimbursed.
*  Poly Network: $610m was hacked from the Chinese platform earlier this month in various coins. The hacker returned all the funds and customers have started being reimbursed.

Incidents involving tens of millions, or even hundreds of millions, of dollars are happening almost every few months and, because these platforms are largely unregulated, there's no guarantee that customers get their money back.


Taking a 'hair cut'
There have been cases of customers losing every digital penny or only being partially refunded - affectionately known as 'taking a hair cut'.


"There will be zero hair cuts," Seth Melamed, chief operating officer of Liquid Global, tweeted on Tuesday.

Financial commentator Frances Coppola says cryptocurrency systems are not learning lessons about security fast enough.

"The standard banking system is incredibly protective about security and it is regulated to death about it," she said.

"Banks are actually suffering hacking attacks all the time. They're just better defended, and also they have responsibility to reimburse their customers, which cryptocurrency platforms don't have."

She says it's individual users who are more likely to be hacked or defrauded in traditional banking systems, which is happening all the time and costing millions.

Traditional bank hacks


Dr Amber Ghaddar, who has worked for big banks and is now a founder at crypto platform AllianceBlock, says traditional banking has seen its fair share of big hacks too.

She points to the hack of $81m suffered by a Bangladesh bank in 2016, and the 2017 incident at Union Bank of India that saw hackers steal $171m, which was later recovered. In each case, no customers lost out.

Dr Ghaddar says crypto-hacks are a symptom of a still new sector that's growing too fast.

"Part of the problem is that these systems are built on open source technology. Open source is great because it uses the collective intelligence of a community to improve software and protocols, but one of the flip sides of open source is that some brilliant mind out there might find some weakness in the code."

Dr Ghaddar thinks that the only way to prevent these attacks from happening is to bring in more regulation and rules.

"We need auditing and testing. We need to have various standards that need to be monitored in order to protect market integrity if we really want cryptocurrency to reach mass adoption."

Crypto chaos


As well as cyber-attacks, everyday investors have been stung over the years by other types of crypto-catastrophe like so-called exit scams and rug pulls.

Investigators are still trying to ascertain how many millions, or maybe even hundreds of millions, were lost in the mysterious demise of the Africrypt exchange which collapsed earlier this year when the founders disappeared.

Customers of Canadian exchange QuadrigaCX are also still fighting for reimbursement after its founder died leaving $135m of coins unaccounted for in 2019.

The traditional finance system is of course littered with victims of large-scale pyramid schemes and other fraud which probably outweigh the losses in the cryptocurrency world.

But despite rapid growth, the crypto market is far smaller overall and recent history points to an industry-wide security problem.

As the $600m hacker warned in a recent public post: "We, the hackers, are the armed forces. If you are given weapons and guarding billions from the crowd while being anonymous, will you be a terrorist or the Batman?"


WATCH: Inside the Bitcoin mine with its own power plant


Newsletter

Related Articles

Arab Press
0:00
0:00
Close
Elon Musk Founds a Party Following a Poll on X: "You Wanted It – You Got It!"
AI Raises Alarms Over Long-Term Job Security
Russia Formally Recognizes Taliban Government in Afghanistan
Saudi Arabia Maintains Ties with Iran Despite Israel Conflict
Mediators Edge Closer to Israel-Hamas Ceasefire Agreement
Germany Seeks Taliban Deal to Deport Afghan Migrants
Emirates Airline Expands Market Share with New $20 Million Campaign
Robots Compete in Football Tournament in China Amid Injuries
China Unveils Miniature Insect-Like Surveillance Drone
Marc Marquez Claims Victory at Dutch Grand Prix Amidst Family Misfortune
Iran Executes Alleged Israeli Spies and Arrests Hundreds Amid Post-War Crackdown
Trump Asserts Readiness for Further Strikes on Iran Amid Nuclear Tensions
Qatar Airways Clears Backlog of Passengers Following Missile Threats
Iran's Parliament Votes to Suspend Cooperation with Nuclear Watchdog
Trump Announces Upcoming US-Iran Meeting Amid Controversial Airstrikes
Trump Moves to Reshape Middle East Following Israel-Iran Conflict
NATO Leaders Endorse Plan for Increased Defence Spending
U.S. Crude Oil Prices Drop Below $65 Amid Market Volatility
“You Have 12 Hours to Flee”: Israeli Threat Campaign Targets Surviving Iranian Officials
Oman Set to Introduce Personal Income Tax, First in Gulf
Germany and Italy Under Pressure to Repatriate $245bn of Gold from US Vaults
Trump Praises Iran’s ‘Very Weak’ Response After U.S. Strikes and Presses Israel to Pursue Peace
WATCH: Israeli forces show the aftermath of a massive airstrike at Iran's Isfahan nuclear site
We have new information and breaking details to share about what is shaping up to be a historic air campaign tonight
Six Massive Bombs Dropped on Fordow; Trump: 'A Historic Moment for the U.S., Israel, and the World'
Fordow: Deeply Buried Iranian Enrichment Site in U.S.–Israel Crosshairs
United States Conducts Precision Strikes on Iran’s Nuclear Sites
US strikes Iran nuclear sites, Trump says
Pakistan to nominate Trump for Nobel Peace Prize.
Israel Confirms Assassination of Quds Force Commander in Tehran
16 Billion Login Credentials Leaked in Unprecedented Cybersecurity Breach
Senate hearing on who was 'really running' Biden White House kicks off
G7 Leaders Fail to Reach Consensus on Key Global Issues
Mass exodus in Tehran as millions try to flee following Trump’s evacuation order
Iranian Military Officers Reportedly Seek Contact with Reza Pahlavi, Signal Intent to Defect
China's Iranian Oil Imports Face Disruption Amid Escalating Middle East Tensions
Trump Demands Iran's Unconditional Surrender Amid Escalating Conflict
Israeli Airstrike Targets Iranian State TV in Central Tehran
President Trump is leaving the G7 summit early and has ordered the National Security Council to the Situation Room
Netanyahu Signals Potential Regime Change in Iran
Analysts Warn Iran May Resort to Unconventional Warfare
Iranian Regime Faces Existential Threat Amid Conflict
Energy Infrastructure Becomes War Zone in Middle East
Iran Conducts Ballistic Missile Launches Amid Heightened Tensions with Israel
Iran Signals Openness to Nuclear Negotiations Amid Ongoing Regional Tensions
Shock Within Iran’s Leadership: Khamenei’s Failed Plan to Launch 1,000 Missiles Against Israel
UK Deploys Jets to Middle East Amid Rising Tensions
Exiled Iranian Prince Reza Pahlavi Urges Overthrow of Khamenei Regime
Wreck of $17 Billion San José Galleon Identified Off Colombia After 300 Years
Iran Launches Extensive Missile Attack on Israel Following Israeli Strikes on Nuclear Sites
×