How does crypto get hacked?

Crypto is rarely stolen by breaking a blockchain. It is stolen from the things built around blockchains: the exchanges that hold customers' coins, the software that links networks, programs with flaws in their code, and the secret keys that control wallets.

Are blockchains themselves hacked?

Hardly ever, for the large ones. To rewrite bitcoin's ledger, an attacker would need to control most of the network's computing power, an assault known as a 51% attack. The cost puts that out of practical reach. Smaller networks with less computing power behind them have suffered such attacks.

So when headlines say crypto was hacked, the ledger almost always worked as designed. It faithfully recorded a transfer that should never have been authorized.

How are exchanges, bridges and smart contracts attacked?

A centralized crypto exchange holds coins for many customers, which makes it a rich target. An attacker who gets into its systems, or tricks staff into approving a transfer, can take a great deal at once.

Mt. Gox, which had been the largest bitcoin exchange, filed for bankruptcy in February 2014 after losing about 850,000 bitcoin. In February 2025, about $1.5 billion in assets was taken from the exchange Bybit. The FBI said North Korea was responsible.

A smart contract is a program on a blockchain that holds and moves funds by fixed rules. Its code is usually public, and a mistake in it can be found by anyone.

In June 2016, an attacker used a flaw in an investment fund called The DAO to siphon off ether worth tens of millions of dollars. The Ethereum community changed the network's rules to undo the theft, a split that created Ethereum Classic.

A crypto bridge moves assets between blockchains and keeps large sums locked while it does. In March 2022, about $620 million was taken from the Ronin bridge after attackers gained control of the keys that approved withdrawals. The FBI attributed that theft to groups linked to North Korea as well.

How are keys stolen?

Whoever holds a wallet's private key controls its coins. Often the key, or the owner's approval, is obtained by deception and not by clever code.

Individuals lose keys through fake websites and messages, malicious software and bogus support agents, as described in phishing and wallet drainers. Companies lose them when an employee is tricked into installing malware or approving a transaction that is not what it appears to be.

What happens to stolen crypto?

The transfer cannot be reversed. Thieves typically split the funds across many addresses and swap them between coins to obscure the trail.

The trail still exists, because most ledgers are public. Exchanges can freeze stolen funds that reach them, and police have made large seizures years after a theft. In February 2022, US authorities recovered most of the bitcoin taken from the exchange Bitfinex in 2016. Such recoveries are the exception.