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February 2, 2023   Blockchain, Crypto, Digital Assets, Tokens, CBDCs, Metaverse, NFTs, Cyber Security, Hacks, Fraud Alerts, Risks, FinTech and Alternative Finance, Fintech International, Research, Stories, Web3, Decentralization, DAOs   No comments

Crypto Hacking Reached $3.8 Billion in 2022 (Biggest on record)

Chainanalysis | Feb 1, 2023

Chainanalysis 2022 hacks by type - Crypto Hacking Reached $3.8 Billion in 2022 (Biggest on record)

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2022 was the biggest year ever for crypto hacking, with $3.8 billion stolen from cryptocurrency businesses.

  • DeFi protocols by far the biggest victims of cryptocurrency hacks accounting for 82.1% of all cryptocurrency stolen by hackers — a total of $3.1 billion — up from 73.3% in 2021. And of that $3.1 billion, 64% came from cross-chain bridge protocols specifically.
    • Bridges are an attractive target for hackers because the smart contracts in effect become huge, centralized repositories of funds backing the assets that have been bridged to the new chain — a more desirable honeypot could scarcely be imagined. If a bridge gets big enough, any error in its underlying smart contract code or other potential weak spot is almost sure to eventually be found and exploited by bad actors.

See:  Do Industry Operators, Researchers, and Regulators Agree On How Big Crypto Crime Is?

  • Double edged sword:  DeFi is one of the fastest-growing, most compelling areas of the cryptocurrency ecosystem, largely due to its transparency.  But that same transparency is also what makes DeFi so vulnerable — hackers can scan DeFi code for vulnerabilities and strike at the perfect time to maximize their theft.
    • The core issue is that DeFi developers prioritize growth over all else, and direct funds that could fund security measures to rewards in order to attract users.
    • DeFi code auditing conducted by third-party providers is one possible remedy to this.
    • Test protocols with simulated attacks.
    • Circuit breakers. DeFi protocols should build out automated processes to pause their protocols and halt transactions if suspicious activity is detected

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NCFA Jan 2018 resize - Crypto Hacking Reached $3.8 Billion in 2022 (Biggest on record)The National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit: www.ncfacanada.org

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