Disasters & Disappointments: 2018’s Biggest Crypto Fails

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This year has not been the best for Cryptocurrency, having endured a prolonged bear market for nearly it’s entirety. Along the way there have been lots of positive news and developments as the companies and teams in the space have continued to “BUIDL“, there have also been a fair share of problems as well.

2018 Crypto Fails

As 2018 enters its final weeks, let’s look back on some of the biggest crypto catastrophes that have occurred this year.

5. Korea Hacking

Crypto attacks occurred in every corner of the world during 2018, and Korea’s “southern half” – often considered a massive crypto and technology hub – saw its fair share. In June, for example, the country was the subject of two exchange hacks – Coinrail and Bithumb – that saw a combined total loss of over $71 million. Coinrail saw roughly $40 million in crypto funds disappear from its assorted hot wallets, while Bithumb lost over $31 million.

Bithumb Hacked

Read: Bithumb Hacked: $30 Million in Assets Stolen

In addition, South Korea’s northern neighbor allegedly victimized the country in several instances through varying crypto-jacking attacks that saw digital assets extracted through South Korea’s computing power.

4. Bitcoin’s End-of-Year Volatility

Following reports that bitcoin was supposedly at its lowest level of volatility in two years, everybody’s favorite cryptocurrency began dropping. First, it fell to the $5,000 range. Then $4,000. At press time, bitcoin is trading at a 15-month low, and going for just over $3,400 a coin. Is this the present left in our stockings for December? Merry Christmas, everybody…

What is Bitcoin? Complete Guide

Read: What is Bitcoin? Ultimate Guide

In addition, many sources claim bitcoin is not done bottoming out, with some saying that bitcoin could fall to as low as $1,000 before it starts to recover.

3. Crypto Crime: $1Billion Stolen

Moscow-based cybersecurity firm Group-IB released a new report stating that nearly $1 billion in crypto funds had been stolen from assorted investors and traders over a two-year period, with more than half disappearing in 2018.

Over the last year, crypto-based crime has gone through the roof, with things like phony initial coin offerings (ICOs) thieving over $500 million from investors. Things have gotten so bad that the Securities and Exchange Commission (SEC) has taken a stronger stance against ICOs, insisting on specific registration processes and punishing those who don’t adhere. Recent SEC settlements include those with Paragon Coin and AirFox. Both allegedly failed to appropriately register their previous ICOs as securities and induced fines of roughly $250,000 each.

2. John Griffin’s Tether Report

This doesn’t have to do so much with a hack or theft, but rather the disenchantment of bitcoin – the world’s number one cryptocurrency – and tether – a prominent stable coin that first arrived in 2014.

Tether Guide

Read: What is Tether?

Back in June of 2018, University of Texas finance professor John Griffin released a new report alleging that the bitcoin price spikes that had occurred so prominently in 2017 were the result of potential manipulation. The report mentioned that every time bitcoin dropped in price by even a small margin, tether was used to purchase the currency and push its value back up. In using tether to purchase BTC, this ultimately tied the currency to USD – which reportedly supports tether prices – and helped keep its value up.

1. Coincheck Hack

Perhaps the biggest event this year is one that, ironically, took place near it’s start. We’re talking, of course, about the infamous Coincheck hack that occurred in January of 2018 and beat the record set by Mt. Gox as the world’s largest cryptocurrency theft.

This one was the big mamma. The one that put the entire nation of Japan on edge. The theft occurred in the first weeks of January and resulted in over $500 million in crypto funds disappearing overnight. The exchange was widely criticized for its hot wallet tactics, and many believed the company hadn’t done enough to protect its customers or their funds.

Japan Cryptocurrency

Read: Japan to Boost Its Cryptocurrency Registration Process for Exchanges

This got the attention of Japan’s Financial Services Agency (FSA). The organization began to take a more active role in the cryptocurrency scene, working with Coincheck to boost its security protocols and writing menacing letters to all competing exchanges saying that if they didn’t do the same, they’d be shut down permanently. Japan is now home to the world’s two biggest cryptocurrency hacks – something it’s probably rather embarrassed about.

Nick Marinoff

Nick Marinoff has been covering cryptocurrency since 2014. He has served as a lead content writer and news editor for Money & Tech; a public relations writer for Game Credits, and a senior writer for both Bitcoinist and News BTC.

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