This article was written exclusively for Investing.com
- Hacking a considerable crypto risk; remember Mount Gox?
- Security and custody go hand-in-hand
- North Korea, Russia, China, and Iran are allied and lead the world in hacking
- Crypto crime is a profitable business
- Economic war should increase risks over the coming months and years
Hacking, which involves gaining unauthorized access to data in a computer system or individual unit, is used to exploit weaknesses in computer systems or networks, either to harm organizations or governments or to steal online assets.
In 2021, a hack impacted the Colonial Pipeline system in Houston, Texas. The system carries gasoline and jet fuel primarily to the Southeastern US. The ransomware cyberattacks caused a shutdown of the computerized equipment that manages the pipeline. Colonial had to pay the hackers, affiliated with a Russia-linked cybercrime group, DarkSide, a $4.4 million ransom.
Another cyberattack that year affected JBS SA (OTC:), a Brazil-based meat processing company, disabling its beef and pork slaughterhouses. The attack impacted the US, Canadian, and Australian facilities, causing JBS to pay an $11 million ransom.
Though neither crime, above, had any impact on the cryptocurrency asset class, security and custody remain significant issues for cryptocurrencies, which because they’re both created and exist online make them susceptible to cyberattacks by hackers looking to steal valuable tokens.
Hacking a considerable crypto risk; remember Mount Gox?
In 2010, was trading at five cents per token; by the end of that year, the price had risen to 29 cents. A year later, on Dec. 31, 2011, the first and leading cryptocurrency rose to $4.19 and kept accelerating. By the end of 2012, it was trading at $13.44 per token and rising fast, so much, so that at the end of 2013, the price had closed at $764.27.
During the same period, Mount Gox, a Tokyo-based cryptocurrency exchange, handled more than 70% of Bitcoin transactions at their peak. During those early days, for cryptocurrencies, Mt. Gox’s prominence made it a prime target for computer hackers, causing more than a few security problems for the exchange.
In 2011, hackers used stolen credentials to…