Although cryptocurrencies have crashed this year, they are still a source of digital cash for hackers.
According to Chainalysis Inc., at least $718 million was stolen in October alone. This brings the total amount of hacks for the year to $3 billion. 2022 is on track to set a new record for the total value.
The majority of targets are so-called Decentralized Finance — or DeFi — Protocols, which use software-based algorithms to allow crypto investors to trade on, borrow, and lend on digital ledgers, without the need for a central intermediary.
Hackers are adept at finding weaknesses in the DeFi marketplace security, coding, and structure. This puts the responsibility on crypto players, given DeFi’s importance for crypto adoption.
2/ At this rate, 2022 will likely surpass 2021 as the biggest year for hacking on record. So far, hackers have grossed over $3 billion dollars across 125 hacks. pic.twitter.com/vgT3pz2iOu
— Chainalysis (@chainalysis) October 12, 2022
Chainalysis announced Thursday that October is the most active month for hacking activity in 2022. They also stated on Twitter that bridges between blockchains were a major vulnerability.
In the last few days, two major hacks have rocked the crypto sector. The first was a Heist in which a hacker stole approximately $100 million from DeFi service Mango by manipulating its token price. In the process, the perpetrator destroyed depositors on DeFi service Mango (1).
Two million Binance Coins, which is roughly $570 million, were minted last week and stolen by a hacker. According to a Binance statement, the remaining $100 million was not recovered and was frozen.
State-sponsored hacking has made DeFi platforms a common target. Chainalysis estimates that approximately $1 billion worth of crypto was stolen by North Korean-affiliated groups from DeFi protocols in the first quarter of this year.
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