Cryptocurrency exchange hacks have become a growing concern for investors, shaking confidence in centralized platforms. In recent years, high-profile hacks like Bybit and WazirX have resulted in billions of dollars lost. If your exchange gets hacked, what should you do next? This guide will provide practical steps and insights to safeguard your investments.
Major Crypto Exchange Hacks in 2024-2025
Recent security breaches highlight the vulnerabilities of centralized exchanges:
- Bybit Hack (February 2025)
- What happened? Hackers stole approximately $1.5 billion in Ethereum (ETH) from Bybit’s cold wallets.
- Why did it happen? The breach was attributed to the Lazarus Group, a North Korean hacking syndicate.
- How did it happen? Exploiting security loopholes, hackers moved funds through anonymous wallets and decentralized platforms.
- Remedies: Bybit implemented stricter KYC, cold storage enhancements, and partnered with cybersecurity firms.
- WazirX Hack (July 2024)
- What happened? Indian exchange WazirX lost $234.9 million in investor funds.
- Why did it happen? Weak multi-signature security led to unauthorized withdrawals.
- How did it happen? Hackers bypassed internal controls and exploited API vulnerabilities.
- Remedies: WazirX enhanced two-factor authentication (2FA), conducted an internal security audit, and compensated users.
These incidents emphasize the need for investor vigilance and proactive security measures.
Immediate Steps to Take After a Crypto Exchange Hack
1. Verify the News & Assess the Situation
Before panicking, confirm the hack through official exchange announcements, reputable news sources, and blockchain analytics firms like Chainalysis or Elliptic.
2. Attempt to Withdraw Your Funds
If withdrawals are still possible, transfer your assets to a cold wallet (hardware wallet like Ledger or Trezor) immediately.
Monitor your transaction history to see if any unauthorized withdrawals have occurred. If so, report them to the exchange immediately.
4. Contact Customer Support & Join Official Channels
Most exchanges provide emergency response teams to assist affected users. Engage with the support team and check their official Telegram, X (Twitter), or Discord for updates.
5. Monitor Hackers’ Movements
Use platforms like Etherscan, Whale Alert, and Arkham Intelligence to track stolen funds on the blockchain. This can help authorities trace and recover lost assets.
6. Report the Incident to Authorities
If your funds are affected, file a complaint with cybercrime divisions such as:
- Indian Cyber Crime Cell (WazirX Users)
- FBI Internet Crime Complaint Center (Bybit Users in the U.S.)
- Interpol’s Cybercrime Unit
Government agencies are increasingly involved in crypto crime investigations.
7. Consider Legal Action & Insurance Claims
Some jurisdictions offer legal recourse if an exchange fails to compensate users. Additionally, some crypto insurance policies, such as Coincover or Nexus Mutual, may cover exchange hacks.
How to Protect Your Crypto Investments from Hacks?
1. Use Hardware Wallets for Long-Term Storage
Cold wallets like Ledger, Trezor, or SafePal provide the highest level of security against exchange breaches.
2. Enable Multi-Factor Authentication (MFA)
Always use Google Authenticator, YubiKey, or biometric verification for exchange logins.
3. Diversify Across Multiple Exchanges & Wallets
Never keep all your crypto assets in one exchange. Split funds between multiple secure platforms and self-custody wallets.
4. Regularly Update Security Measures
Change passwords frequently, disable unused API keys, and stay updated on phishing scams.
5. Use Decentralized Exchanges (DEXs) for High-Risk Trades
DEXs like Uniswap, PancakeSwap, and dYdX reduce third-party risk but require self-custody responsibility.
6. Stay Updated on Exchange Security Audits
Before using an exchange, check if it has undergone security audits by CertiK, SlowMist, or PeckShield.
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Final Thoughts
Crypto hacks are an unfortunate reality, but investors can minimize risk with proper security practices. If your exchange is hacked, act swiftly, stay informed, and explore alternative storage solutions. With the right precautions, you can navigate the crypto space safely and confidently.
FAQs
- Can I recover my crypto after an exchange hack?
Recovery is possible if the exchange compensates users or if law enforcement tracks stolen funds, but outcomes vary. - How do hackers steal crypto from exchanges?
Hackers exploit security flaws, phishing attacks, API breaches, and cold wallet vulnerabilities to siphon funds. - Should I use a decentralized exchange instead of a centralized one?
DEXs eliminate third-party risk, but require self-custody. They’re safer for advanced users comfortable with private key management. - Are all centralized crypto exchanges at risk of hacking?
Yes, but some have better security protocols than others. Always research an exchange’s security history. - What is the safest way to store cryptocurrency?
Hardware wallets and offline cold storage provide the highest level of protection.
Sources:
https://wazirx.com/blog/wazirx-cyber-attack-day-wise-report/?utm_source=chatgpt.com
https://www.bybit.com/en/help-center/article/How-do-I-secure-my-account-To-reduce-the-possibility-of-hacking
https://www.reuters.com/technology/cybersecurity/fbi-says-north-korea-was-responsible-15-billion-bybit-hack-2025-02-27/?utm_source=chatgpt.com