Those of you who have been around in the crypto thing probably remember that exactly four years ago, we witnessed one of the most notorious hacks in the history of digital assets.
Back in 2014, there was an exchange called Mintpal and to say that it had a rough year would be a major understatement. First, it came to life in February and according to statements from its developing team it had two major goals in mind – ultra fast support and the best UX possible. Every month Mintpal added new assets, the most popular among them. These tactics proved to be working pretty well since at one point it was one of the most well-known exchanges offering altcoins.
However, on July 13 someone conducted an attack at a Vericoin wallet and successfully ran away with 8,000,000 Vericoin tokens. Back then that was worth $2 million and the number of tokens stolen was roughly 30% of the circulating supply. What’s the moral of the story? If you keep your tokens in a hot wallet (like Mintpal did) you are an easy target.
The culprits tried to drain Bitcoin and Litecoin wallets as well but this time Mintpal was clever enough to store its Litecoin and Bitcoin supplies in cold wallets. If you are new to cryptocurrency and you are not familiar with the types of cryptocurrency wallets, refer to our Ultimate Guide to Cryptocurrency Wallets.
At around the same time, Alex Green’s Moolah (officially known as Moopay LTD.) acquired Mintpal. The idea was Mintpal to act the main altcoin exchange for Green’s then operating platform. Unfortunately, Mintpal just was born with a bad luck. In late October, the exchange suffered another attack and as a result, 3,700 Bitcoins vanished out of thin air.
Surprisingly, the community later revealed that it was actually Alex Green, the CEO of Moolah, who staged the whole thing. At that time, the stolen Bitcoins were worth $1,500,000. Thankfully, three years later, in 2017 the authorities launched a criminal investigation, which is still going.
What’s the moral of the story? You cannot trust an exchange but you can trust a cold wallet. In fact, this is more relevant than ever since in 2018 the cybercriminals have stolen $833 million worth of crypto. Get your Trezor, KeepKey, or Ledger now and show them the finger!