Blockchain: Is it a hoax?  107

• In January 2015, a Chinese cryptocurrency exchange known as 796

was hacked by comprising an infrastructure server. Hackers tampered

with withdrawal addresses to trick their users. A major shareholder of

the exchange had to absorb the loss due to the hacking of 1,000 BTC.

Users of the exchange did not have to take an impact.

• In October 2014, a cryptocurrency exchange called MintPal was

hacked with a loss of 3,700 BTC. It was a second hack after the hack

on July 2014. After the first hack in July 2014, MintPal was purchased

by a company called Moolah Ltd. owned by Ryan Kennedy. After

a failed relaunch of MintPal, Moolah Ltd. announced that it was

closing its doors; however, users would be able to still use MintPal.

Users’ accounts were locked, and users were able to track funds being

removed from their wallets and sold on another platform. Ryan

Kennedy was the only one with access to customers’ funds and ran

away. He was arrested in 2016 for fraud charges and is now in jail.

He also faced charges from the UK police for his involvement in the

MintPal hack.

• In July 2014, a cryptocurrency exchange called Cryptsy was hacked

by hackers stealing 13,000 BTC and 300,000 LTC. A hacker known

as Lucky7Coin inserted a Trojan virus into the code of Cryptsy. Paul

Vernon, the owner of the exchange, was accused of destroying evi-

dence and stealing Bitcoin himself. The exchange filed for insolvency.

Paul Vernon was successfully sued for $8.2 million in a class-action

lawsuit.

• In July 2014, a cryptocurrency exchange called MintPal was hacked

with a loss of 8 million VRC (Vericoin). The hacker found a vulner-

ability in the withdrawal system on the exchange and managed to

authorise a withdrawal from the Vericoin wallet. The hack resulted in

the loss of 30% of all Vericoin coins.

• In March 2014, Mt.Gox came still into the limelight. It appears that

when Mt.Gox was originally hacked in 2011, some private keys were

also stolen by malicious actors. The hackers gained access to a sub-

stantial number of Bitcoin wallets and started emptying them. Due to

the flaw in the Mt.Gox systems, the exchange was interpreting these

withdrawals as deposits for nearly 2 years. It cost users $45 million

and also cost exchange to close. Mt.Gox filed for bankruptcy within

a month. The former CEO of Mt.Gox was arrested in 2015 for fraud

as it was discovered he had $2 million worth of Bitcoin that had alleg-

edly been stolen in the hack. In November 2017, a Russian national

by the name of Alexander Vinnik was arrested by the US authorities

for playing a key role in laundering the Bitcoin that has been stolen

in the hack.

• In March 2014, a US-based cryptocurrency exchange called Poloniex

was hacked, losing 97 BTC. Hackers managed to take advantage of an