Major Crypto Hacks

As always, crypto hacks are undermining trust in the fast moving world of blockchain. Hackers are always after weaknesses in wallets, platforms, and smart contracts, and from multi million dollar exchange breaches to DeFi protocol exploits they are finding them all the time. Their targets are clear: logic, permission, and poor security design vulnerabilities. The response does not have to be passive, however. Just as with builders, holders can also stay ahead of attackers — moving beyond common flaws by securing storage, deploying multi-sig solutions, and even subjecting their code to formal verification audits by firms like Dowsers Finance.

1. Recent Major Crypto Hacks

High-Profile Exchange Hacks

Mt. Gox : The Breach That Shook Bitcoin

In early 2014, then the world’s largest Bitcoin exchange, Mt. Gox, was hacked and lost 850,000 Bitcoins (then $460M worth). The disaster shows how easy it is to break centralized exchange security — from weak internal controls to detrimental system architecture. It triggered industry wide calls for tighter security, third party audits and much stronger operational safeguards.

Lesson for Builders : So, centralised systems need to be hardened against the Insider threats and External breaches. Core transparent security practices are necessary along with continuous audits.
Lesson for Users : Look for exchanges that provide asset insurance : like Binance’s Secure Asset Fund for Users (SAFU) that took user losses following their 2019 breach.

Poly Network : The $600M Heist

When 2021 set in, one of the biggest DeFi hacks ever took place on the Poly Network, which forked out a $600M breach. The attackers took over what appeared to be a huge amount of funds, exploiting a flaw in the protocol’s cross chain bridge. The hacker returned the stolen assets in a strange twist where they said they were trying to ‘people learn because shit broke’.

Lesson for Builders : The attack also exposed how a single uncovered problem can irreparably damage a whole protocol. Had this been formal verification and exhaustive audits, this breach was preventable.
Lesson for Users : Interact with a DeFi protocol only if it has gone through a third party audit. It is a ticking time bomb unverified code.

Ronin Network : Gaming Meets DeFi Risk

In 2022, the Ronin Network (behind the Axie Infinity game) attack cost $615M. Weak validators on the cross chain bridge were targeted by hackers who exposed flaws in multi signature verification processes.
Lesson for Builders : Increase validator nodes and multi sig confirmations to strengthen cross chain security. It opens the door to big scale attacks based on flawed validation.
Lesson for Users : Bridges are inherently risky. Distribute where you keep your assets and do not keep more on bridges.

2. Crypto Hacks Common Vulnerabilities

Weaknesses in centralized Service

Exchange and custodial wallet platforms are, unfortunately, ‘all eggs in one basket’ risk. Exposing millions of users all at once presents a single point of failure. They are, therefore, a top target for hackers.
Example: Back in 2019, the Binance hack was based on a weakness in API keys and multi factor authentication that allowed hackers to siphon $40M worth of Bitcoin.

Solution for Builders : Platforms have to refrain from being opaque and aim towards continuously being transparent, undergo continuous security audits, and create robust anti phishing, anti malware tools integrated in them.
Solution for Users : Choose platforms with insurance funds (like Binance’s SAFU) and, of course, secure your own accounts with Multi Factor Authentication (MFA).

DeFi Smart Contract Exploitation

While smart contracts are “immutable”, they are not “unhackable.” While hackers can still distort the system if the logic in the contract is faulty.
Example: It was a flawed permission system that was exploited in the Poly Network hack, and the attacker was able to control the contract.

Solution for Builders : By formal verification—something that Dowsers Finance provides—smart contract logic is mathematically proved to be secure. Just solid proof, no guess work.
Solution for Users : Make sure you audit any DeFi platform you intend on using, preferably by one that is well known to you like Dowsers Finance. Projects that give precedence to formal verification have a much lower chance of getting broken.

Wallet and Custodial Risks

Infrequently used hot wallets (online) are necessary, but they’re vulnerable to phishing and malware attacks. However, the better protection lies with cold wallets—offline that is, hardware wallets.
Example: In 2020, fraudsters advertised accounts for sale that accessed Ledger data breach victim emails and addresses, leading to phishing scams targeting Ledger wallet holders.

Solution for Builders : Such custodial wallet providers need to primarily focus on encryption, multi sig protection and real time monitoring of any unusual activities.
Solution for Users : Keep crypto in big amounts in a hardware wallet. Don’t reuse passwords, and never share your private keys.

3. Preventing Crypto Hacks – Best Practices

Secure Storage Solutions

For Builders : They may offer hybrid solutions — solutions that balance security and accessibility. Get users using cold storage for savings and hot wallets for transactions everyday. Janet needs to extend multi-sig support for large value transfers.

For Users : Your best bet for safekeeping is cold wallets (hardware wallets). Daily transactions must be made with hot wallets. Platforms like Dowsers Finance are unique; they focus on secure storage as part of the audit process so that developers can be sure their security is baked in from the start.

For Users and Builders, our mission is to perform Smart Contract Audits.

For Builders: The strength of a smart contract is only as strong as the weakest line of code it contains. Formal verification (by Dowsers Finance, for example) mathematically ensures security, but advanced audits can pick up flaws in the first place. It is the gold in crypto security.

For Users: Don’t engage with DeFi protocols that haven’t been audited. Unchecked contracts have proven to be dangerous that hacks like Poly Network’s $600M breach are good examples. Search for projects which have proper audits from companies like Dowsers Finance.

Why Dowsers Matters: Unlike typical audits, Dowsers Finance performs AI driven formal verification that finds logic errors, backdoors and vulnerability bugs before ship date. This is a proactive manner which doesn’t just finds errors but guarantees contracts behave as expected.

The Future of Crypto Security

Crypto hacks aren’t just costly mistakes, they’re trust breakers. To the contrary, as the industry matures security will become more a proactive than reactive issue. To build a safer ecosystem, we need to get builders, holders, and DeFi developers on the same page.

Here’s the path forward :

• For Builders: Formal verify smart contracts. Investors want it, and it’s no longer optional.
• For Users: Only interact with platforms that use audit firms such as Dowsers Finance. Verified security projects have far fewer risks.
• For The Industry: Security isn’t a checkbox. It’s a shared responsibility. We all need to ask for better from projects, developers, and platforms.

Formal verification and real-time audits can move the industry from an ‘hack recover’ to an ‘hack prevent’ future, and a combination of such measures can truly put in place a secure storage practice. Dowsers Finance is at the heart of that future, and it’s the ally every builder and user needs to know that security is never a question, but a certainty.

Conclusion : Making a Safer Crypto Future

The innovation means that the risk is out there too in the crypto industry. Our defenses will have to evolve, but there will be hackers to evolve. (formal verification audits), at the same time protecting one’s platform and one’s assets, holding builders and holders with real time threat monitoring and supporting wallet security. If the community adopts proactive strategies, rather than reactive responses, vulnerabilities could be reduced and a new era of trust with blockchain technology can be created.

Dowsers offers the most secure crypto development. They get rid of the guesswork from smart contract security with AI powered audits and formal verification. It’s not just about fixing holes after someone has attacked you, it’s about having security from the start. Dowsers are a must if you’re seriously looking to build a safer DeFi.