How Hackers have stolen more than $1 billion from cryptocurrency exchanges this year

Seven cryptocurrency exchanges around the world were targeted by hackers in 2018, according to the Wall Street Journal.

Going back to 2011, more than 56 cyberattacks have taken place, resulting in the theft of more than $1.6 billion.

Security threats have weighed on market sentiment, but there are also opportunities for companies to provide safe storage options.

The popularity of cryptocurrency has given rise to a proliferation in the number of crypto exchanges.

The website coinmmarketcap.com lists 205 crypto exchanges, with Japan-based Binance topping the rankings for 24-hour transaction volume.

Clearly, there's opportunity to make a profit by clipping the ticket on crypto trades.

At the same time, more transaction providers in the nascent, largely unregulated market for cryptocurrencies means more targets for hackers. So far in 2018, the hackers have been busy.

A report in the Wall Street Journal shows more than $800 million worth of cryptocurrency has been stolen by hackers this year.

The figures are based on an investigation by Autonomous Research, an independent research provider for the finance industry.

The biggest hack this year took place on Coincheck, a Japanese-based exchange which had more than $500 million worth of crypto stolen in late January.

Last month, South Korean exchange Bithumb was targeted, as hackers made off with around $30 million while the company suspended operations and moved its crypto holdings to cold storage.

While companies such as Binance, Coincheck and Bithumb are usually referred to as exchanges, their functions differ from traditional stock exchanges such as the ASX.

Earlier this year, chair of the Australian Digital Commerce Association Loretta Josephtold Business Insider that exchanges should be referred to as "digital marketplaces" as they aren't regulated and merely provide a forum for buyers and sellers to independently exchange crypto.

Another way in which crypto exchange companies differ from stock exchanges is that they often provide a vehicle to store users' cryptocurrency, which is also what makes them a target for hackers.

Going back to 2011, there's been a total of 56 cyber attacks across currency exchanges and initial coin offerings.

Autonomous Research said there's been seven crypto exchange hacks so far this year, four of them in Asia.

While the hacks have weighed on market sentiment to some degree, there are also opportunities for companies which provide same crypto storage options.

Earlier this year, French based Ledger — a crypto startup which provides hardware for people to store their crypto offline — raised $75 million in a Series B funding round led by venture capital firm Draper Esprit.

Read the original article on Business Insider Australia. Copyright 2018. Follow Business Insider Australia on Twitter.