According to a recent report from blockchain analysis firm Chainalysis, losses associated with crypto hacks surged almost 60 percent between January and July of this year, pushed by an increase in funds stolen from decentralized finance (DeFi) protocols.
According to the report released on Tuesday, a total of $1.9 billion was lost to hacks between the period of January and July this year. A total of $1.2 billion was lost to hackers in the same period last year.
In its report, Chainalysis mentioned that the trend is not expected to either come to an end or slow down soon. There have been several hacks this month already. Cross-chain bridge Nomad lost $190 million to hackers earlier this month and several Solana wallets have lost the sum of $5 million this month also. “DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and grow quickly lead to lapses in security best practices,” Chainalysis wrote in its report.
So far, many of these hacks on DeFi protocols have been affiliated with North Korea, especially top hacking groups like Lazarus Group. According to Chainalysis, North Korea-affiliated hackers have ripped DeFi protocols off the sum of approximately $1 billion worth of cryptocurrency.
Chainalysis noted that there was a 65 percent decline through July following a decline in cryptocurrency prices, adding that scam revenue in the year to July totaled $1.6 billion, down from $4.46 billion in the same period last year. According to the research firm’s Director of Research Kim Grauer, “Scams are down primarily because of the crypto downturn, but also because of the many law enforcement wins taken against scammers and the product solutions that exchanges can use to fight scamming.”
Chainalysis also noted that since the beginning of this year, scam-related revenue has fallen in line with the price of Bitcoin. The research firm also mentioned that the total number of individuals that fall into crypto scams dropped drastically in 2022; the lowest in the last four years. “Those numbers suggest that fewer people than ever are falling for cryptocurrency scams. One reason for this could be that with asset prices falling, cryptocurrency scams — which typically present themselves as passive crypto investing opportunities with enormous promised returns — are less enticing to potential victims,” Chainalysis wrote.
Ibhadojemu Lucky Emmanuel is a graduate of Education and Economics from the University of Benin. He has a passion for tech and business and has been writing professionally for over a period of five years. He's written across various topics and segments and knew tech-business was it when he first stumbled on it. He has a great passion for music and arts, and wants to visit as many countries as he can someday.
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