HomeTechnology & InnovationCrypto hacking totalled a record $3.8 bn in 2022
By Economy Middle East
February 2, 2023 10:42 am

Crypto hacking totalled a record $3.8 bn in 2022

In October alone, $775.7 million was stolen in 32 separate attacks
Crypto hacking
Crypto hacking

2022 was the biggest year ever for crypto hacking, with $3.8 billion stolen from cryptocurrency businesses, up from $3.3 billion in 2021. This increase is even more pronounced when compared to 2019 and 2020, when the total for each year was significantly lower at $0.5 billion, according to a recent report from blockchain analysis firm Chainalysis.

Over the course of 2022, October stood out as the biggest single month ever for cryptocurrency hacking, as $775.7 million was stolen in 32 separate attacks, with the hacks on BNB Chain and Mango Markets being the two most notable ones. March saw another spike in cryptocurrency hacking with $732.4 million stolen, driven in large part by the hack at Axie.

Read more: U.S seizes $30 mn in crypto from North Korea-linked hackers

These insights into crypto hacking — part of Chainalysis’ annual Crypto Crime Report — also revealed a shift in targets. Until 2020, hackers most heavily targeted centralized exchanges; now the victims of illicit activities are disproportionately in Decentralized Finance (DeFi). DeFi protocols accounted for the overwhelming majority (82.1%) of all cryptocurrency stolen by hackers — a total of $3.1 billion — up from 73.3% in 2021.

Explaining this trend, Kim Grauer, Director of Research, Chainalysis said, “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.”

“DeFi protocols remain vital to the future of the crypto ecosystem, and their inherent transparency has many important benefits. But in order to grow, thrive, and eventually penetrate the mainstream, these DeFi protocols need to prioritize security such as third-party code audits,” Grauer added.

Through its analysis of on-chain activities, Chainalysis was also able to determine that North Korea-linked groups have by far been the most prolific cryptocurrency hackers over the last few years. In 2022, these groups shattered their own records for theft, stealing an estimated $1.7 billion worth of cryptocurrency across several hacks. This figure eclipses the amount generated by all exports by the country — which in 2020 totaled just $142 million worth of goods — indicating that cryptocurrency hacking now likely contributes a sizable portion of the nation’s economy. North Korea is also one of the driving forces behind the DeFi hacking trend that intensified in 2022 as $1.1 billion of the cryptocurrency stolen by hackers linked to the country was from DeFi protocols.

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