Hackers stole a record $3.8 billion worth of cryptocurrency globally last year, led by thieves linked to North Korea, according to a blockchain analytics firm that tracks cybercrime.
Chainalysis researchers called 2022 “the biggest year on record for crypto hacking” in a report released last week. Thefts rose from $3.3 billion stolen in 2021, the firm reported. Separately, a confidential United Nations report found that North Korea stole more cryptocurrency assets last year than any other year, Reuters reported on Monday.
During the coronavirus pandemic, American investors poured millions into bitcoin, ether, dogecoin and other popular tokens in hopes of generating a fortune. But some investors have instead suffered losses from hackers, with their digital wallets being looted on platforms with poor cybersecurity.
North Korean cybercriminals “broke their own annual record for most cryptocurrency thefts” and totaled $1.7 billion in thefts in 2022, according to the Chainalysis report.
Given that North Korea’s total exports in 2020 totaled $142 million, “it’s no exaggeration to say that cryptocurrency hacking is a significant part of the national economy,” the officials added. researchers.
As more investors lost money in crypto, US lawmakers renewed their calls to regulate the crypto industry. The scrutiny of the sector became even more intense in November when FTX Trading, the third largest crypto platform, suddenly collapsed and declared bankruptcy.
The number of crypto hacks “fluctuated” in 2022 with big spikes in March and October, Chainalysis said. October was “the biggest month ever for cryptocurrency hacking” with 32 attacks totaling $775.7 million lost, according to the report.
Hackers have focused their activities on decentralized finance, or DeFi, platforms which were linked to 82% of stolen funds last year, Chainalysis said. Criminals usually strike when crypto investors use a so-called “cross-chain bridge” to transfer funds from one blockchain to another.
October’s biggest hack took place when someone looted $586 million in crypto from an inter-chain bridge owned by Binance. The company acknowledged the hack and said its security officers “were able to minimize the loss”.
Bad actors can exploit DeFi platforms because some crypto companies haven’t prioritized security, said David Schwed, chief operating officer of blockchain security firm Halborn.
“A large protocol should have 10-15 people on the security team, each with a specific area of expertise,” Schwed said in the Chainalysis report. “The DeFi community doesn’t typically demand better security — they want to move to high-yielding protocols. But those incentives cause problems along the way.”