A record $3.8 billion in crypto stolen in 2022
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.
Researchers at Chainalysis called 2022 “the biggest year ever for cryptohacking” in a report published last week. Thefts rose from $3.3 billion stolen in 2021, the firm reported. Separately, a confidential UN report found that North Korea stole more cryptocurrency assets last year than in any other year, Reuters reported on Monday.
During coronavirus pandemic, US investors poured millions into bitcoin, ether, dogecoin and other popular tokens in hopes of generating a fortune. But some investors instead suffered losses due to hackers, with their digital wallets raided on platforms with poor cyber security.
North Korean cybercriminals “shattered their own annual record for most stolen cryptocurrencies” and accounted for $1.7 billion in thefts in 2022, the Chainalysis report said.
Given that North Korea’s total exports in 2020 amounted to $142 million, “it is not difficult to say that cryptocurrency hacking is a significant part of the country’s economy,” the researchers added.
As more investors lost money on crypto, US lawmakers have renewed calls to regulate the crypto industry. 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 “ebbed and flowed” in 2022 with major peaks in March and October, Chainalysis said. October was “the biggest single 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.
The biggest hack from October took place when someone looted $586 million in crypto from a cross-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 have not prioritized security, said David Schwed, CEO of blockchain security firm Halborn.
“A large protocol should have 10 to 15 people on the security team, each with a specific area of expertise,” Schwed said in Chainalysis’ report. “The DeFi community is generally not demanding better security – they want to move to high return protocols. But these incentives lead to problems down the road.”
