In Wake Of $4.5B Bitcoin Laundering Scheme Arrest, A Look At Big Heists At Crypto Platforms 

Mining bitcoin

One of the more colorful stories making headlines now surrounds the arrest of a rap and advice video-making couple charged with conspiring to launder around $4.5 billion worth of cryptocurrency stolen from Bitfinex’s platform in 2016.

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Authorities arrested the married pair, Ilya Lichtenstein and Heather Morgan, in Manhattan Tuesday morning. Thus far, the Department of Justice said law enforcement has seized over $3.6 billion in cryptocurrency linked to that hack.

So, $4.5 billion is a lot of money. But it is just one many big-ticket heists linked to prominent cryptocurrency platforms, including a number that have raised significant venture funding. 

With an eye to putting this latest partially solved crime news in context, we decided to take a look at some of the larger thefts in recent years, and what impact that has had on target platforms’ future funding.

Here goes:

Poly Network: Cryptocurrency exchange Poly Network was hit by a major attack in August during which a hacker stole more than $600 million worth of tokens. Later that month, the hacker returned the tokens.

Coincheck: Coincheck, a Japan-based cryptocurrency wallet and transaction platform, reported a theft of approximately $535 million worth of NEM coins, a lesser-known cryptocurrency, in early 2018. At the time, the theft ranked as the largest involving digital currency, per BBC.

KuCoin: KuCoin, a Seychelles’-based cryptocurrency exchange, reported a theft of $285 million in Bitcoin and other tokens in September 2020. A North Korean hacker was accused of being behind the heist. KuCoin said it managed to recover most of the digital currency stolen.

BitGrail: BitGrail, an Italy-based crypto exchange, reported a loss from theft in February 2018 of $170 million in the coin Nano. 

MT Gox: MT Gox, a now-collapsed crypto exchange, is one of the more infamous brands associated with Bitcoin losses. The Tokyo-based crypto exchange collapsed in 2014 after losing half a billion dollars in Bitcoin.

It’s not an exhaustive list, but one theme seems pervasive: Companies that report the biggest thefts generally don’t go on to raise big venture funding rounds. Many, particularly the earliest exchanges to fall prey to hackers, are no longer around.

Illustration: Li-Anne Dias

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