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Author: Admin | 2025-04-27
Wallet hacks are a growing concern in the world of cryptocurrency. With each passing year, these hacks become more common, challenging the potential mainstream success of blockchain technology. Understanding the mechanics, history and impact of crypto wallet hacks is key for your continued DeFi security. In this blog post, we’ll review a history of crypto hacks before diving into how these hacks happen, what you can do to prevent them and how FailSafe can help.A Brief History of Recent Crypto Wallet Hacks“Not your keys, not your coins” is the mantra that embodies Web3 philosophy. Self-custody keeps your crypto safe from centralized exchange hacks and bankruptcy. However, it also opens up a whole new world of potential threats.While the crypto security sector continues to grow, there is no lack of wallet hack examples. Atomic Wallet, Exodus, and Trust Wallet were some of the high profile examples in recent years, accompanied by a range of other notable crypto breaches, including the Sushiswap DEX Hack.Reviewing these high profile wallet hacks will help us understand what happened and how they could have been prevented.Atomic Wallet HackIn mid-June 2023, Atomic Wallet suffered a $100-million exploit that affected over 5,500 crypto accounts on the platform. Atomic Wallet hasn’t yet clarified what conditions exactly led to the exploit but instead laid out the four most “probable” causes:Malware on user devicesInfrastructure breachMan-in-the-middle attackMalware code injection50 customers that lost a combined $12 million have since filed a class action lawsuit against Atomic Wallet.Exodus Wallet HackIn September 2023, technical analysis educator Jayson Casper reported his Exodus wallet had been hacked for $700k worth of tokens.Exodus’ support team responded with the following message:Individuals have been impersonating the Exodus support team with the intent to steal sensitive information like your 12-word phrase or lead you to malicious links that appear similar to our official website, Exodus.com.Exodus further points out in their 2020 blog post that the biggest risk to Exodus wallets is storing the secret recovery phrase electronically. This practice makes it easy for any hacker with access to your computer to drain your wallet.Trust Wallet HackTrust Wallet released a browser extension on November 14, 2022 that allowed users to access digital assets on several blockchains directly from the browser. This extension had insufficient security, however, that allowed hackers to compute all potential seed phrase lists and corresponding private keys for any wallet created with the extension, putting all wallet funds at risk.Luckily, this flaw was quickly identified by Ledger Donjon on November 17, 2022, preventing what would have otherwise been one of the largest hacks in crypto. The vulnerability was announced publicly on April 25, 2023.How Do Wallets Get Hacked?At the root of every crypto hack, you’ll find one or several of the following factors. Understanding these potential issues will help you become more aware of the risks with your wallets.Wallet hacks typically stem from a combination of software vulnerabilities and user behavior risks. By unpacking these factors, users can enhance their awareness and bolster their defenses against potential security breaches.1.
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