Imagine your bank calls to tell you that your entire fortune was just robbed by a masked bandit. But it’s not the Wild West, and you’re not a railway baron watching a gang of outlaws ride off with sacks of gold. Instead, it’s the 21st century, and the heist happened in cyberspace. The thieves didn’t need dynamite or a six-shooter—just lines of code and a well-placed exploit.
The latest string of crypto heists makes even the most infamous train robberies look quaint by comparison. Jesse James and Butch Cassidy once made headlines for looting thousands from locomotives and banks, but in 2024, hackers are stealing billions without ever setting foot inside a vault. The recent Bybit hack alone saw over $1.4 billion vanish, making it one of the biggest cyber heists in history. And like the old Western gangs who scouted out poorly guarded trains, hackers today are exploiting gaps in security—often in places that crypto exchanges have deemed “out of scope” for bug bounty rewards.
The Modern Digital Heist
On March 3, blockchain security firm CertiK reported that crypto losses from hacks had reached $1.53 billion in February alone. The Bybit hack accounted for most of this, but even without it, other exploits racked up $126 million in stolen funds—including a $49 million Infini hack.
At the heart of these incidents is a common theme: weak incentives for ethical hackers. The Bybit exploit was traced back to a phishing attack that tricked multisignature signers into approving a malicious contract upgrade. This type of vulnerability wasn’t covered under Safe’s (Bybit’s multisig provider) bug bounty program, meaning white hat hackers had little motivation to flag it. While Bybit officially offers just $4,000 to $10,000 for reported security flaws, the hackers walked away with a sum that would make old-school bank robbers weep.
Security researcher Marwan Hachem warns that ignoring such vulnerabilities is a fatal mistake. “What they considered out of scope led to the biggest crypto hack in history,” he said. Ethical hackers often find security gaps in these “out of scope” assets, but with no rewards for reporting them, the only ones who benefit are the criminals.
Read the full story here: Cointelegraph.
Lessons From The Wild West
Back in the 1800s, train barons learned the hard way that their safes weren’t as secure as they thought. The infamous Great Train Robbery of 1866 saw the Reno Gang make off with thousands of dollars from an unguarded safe. Banks tried to adapt—introducing time-locked vaults and hiring Pinkerton detectives—but outlaws found new ways to strike.
Crypto exchanges today face a similar dilemma. Despite multi-million-dollar security budgets, hackers are always one step ahead. The difference? In the old days, stolen gold had to be laundered through fences and underground networks. Today’s criminals can move digital assets through mixers, decentralized exchanges, and cross-chain swaps, making them almost impossible to track.
Fixing the Bounty Problem
There’s a brutal irony in the current bug bounty landscape. Some exchanges offer tiny rewards to ethical hackers while promising 10% of stolen funds to attackers who return them after a successful hack. This kind of system incentivizes crime—why report a vulnerability for a few thousand dollars when you could steal millions and negotiate a payout?
Hachem argues that exchanges should pay ethical hackers more upfront to prevent major exploits instead of dealing with costly breaches later. CertiK also recommends air-gapped signing devices, stronger authentication, and real-time transaction monitoring to mitigate risk.
But unless exchanges take these warnings seriously, the digital Wild West will continue. The gunslingers may be gone, but the heists are bigger than ever. And the next billion-dollar theft could be just one overlooked vulnerability away.