Altsbit

On February 5, 2020, Altsbit, a fledgling Italian cryptocurrency exchange barely four months old, was gutted by a devastating hack that obliterated nearly half its holdings, forcing its closure by May 8. Announced via Twitter on February 6, the breach saw hackers loot 6929 BTC of 14782, 23210 ETH of 32262, 3924082 ARRR of 9619754, 414154 VRSC of 852726, and 1066 KMD of 48015, valued at roughly $330,000 including $72,500 in Bitcoin and Ethereum alone, per CoinDesk and CoinTelegraph. The black-hat group LulzSec claimed responsibility, boasting on Twitter that Altsbit’s shoddy security couldn’t withstand their “Lulz Canon,” a taunt echoing their 2011 Sony Pictures hack, per The Coin Republic. Launched in October 2019 after a rebrand, Altsbit’s $14.8 million daily volume, dominated by ARRR/BTC trades, masked its vulnerabilities, with a roadmap relegating “user security functions” to fifth priority, per Bitcoinist.

The exchange, storing most funds in hot wallets, left only a fraction safe in cold storage, enabling partial refunds from February 10 to May 8, as outlined on its website. Social media erupted, with Reddit’s u/CryptoSentry labeling it a potential exit scam, while @CharlieShrem mocked the “small part” saved, per AMBCrypto. No funds were recovered in 2020’s regulatory void, and LulzSec’s threat of further attacks amplified fears. The hack, among five major breaches that year totaling $286.9 million per CoinGeek, cemented the risks of centralized exchanges, spurring demands for decentralized platforms, mandatory cold wallet usage, and proactive security audits to safeguard the crypto landscape.