1
Crypto is typically stolen in three main ways: exchange hacks, hacked user accounts on exchanges, and physical theft of self-stored private keys.
2
Exchange hacks involve professionals breaking into a platform to steal funds collectively, with the historical Mt. Gox heist being a prominent example.
3
Compromised accounts occur when an individual's password is stolen, allowing attackers to log in and transfer funds, which the exchange classifies as a user security failure rather than a platform hack.
4
Self-storage risks include physical theft of items containing recovery codes or private keys, such as paper backups, thumb drives, or computer hard drives.
5
Blockchain transactions are immutable, meaning once a transfer is executed, funds cannot be reversed or easily tracked to an actionable identity.
6
Because cryptocurrency operates outside government control as an extraterritorial financial system, victims have no legal recourse or state support to recover lost or stolen funds.