Losses from cryptocurrency hacks rise 60% to $1.9 billion

Deepak Gupta August 17, 2022
Updated 2022/08/17 at 12:31 AM

Despite the constant ups and downs, the cryptocurrency market continues to be very attractive for many users, especially since their value is quite attractive. But, as we have mentioned, this is an unstable sector and, currently, it is not going through its best phase. In addition, there are always security issues as it is digital money.

As such, recent data indicates that losses due to cryptocurrency hacks increased by 60% between the months of January to July 2022, which represents an amount of 1.9 billion dollars of lost money.

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Hacks lead to a 60% increase in cryptocurrency loss

According to a study carried out by the company Chainalysisand published by Reuterslosses from cryptocurrency hacks increased by almost 60% in these first seven months of the year, between January and July 2022. This percentage then indicates that the amount involved in these losses rose to 1.9 billion dollars, and this increase was mainly driven by funds stolen from decentralized financing protocols known as DeFi.

Chainalysis revealed this data this Tuesday (16) through its official blog, where it is also indicated that in the same period last year the funds stolen by hackers totaled 1.2 billion dollars, that is, less 7 billion of dollars.

But the research firm also said that this trend is unlikely to reverse as soon as desired and mentions the recent $190 million hacking of the Nomad crypto bridge and the $5 million hacking of various Solana cryptocurrency wallets, both of which took place. in the first week of August.

In its blog, Chainalysis states that:

DeFi protocols are especially vulnerable to hackers as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it is possible that the protocols' incentives to come to market and grow quickly lead to lapses in best practices. of security.

The company adds that many of these thefts may originate from entities affiliated with North Korea, especially elite hacking units such as the Lazarus group. It is estimated that, to date, affiliated groups in North Korea have stolen around $1 billion worth of cryptocurrencies from DeFi protocols.

In turn, with regard to scams with digital currencies, the company highlights a significant decline of 65% until July, to 1.6 billion dollars, which is in line with the sharp fall in the value of digital assets. In the same period in 2021, scams totaled $4.46 billion.

Kim Grauer, research director at Chainalysis, told Reuters that "Scams have dropped mainly because of the cryptocurrency downturn, but also because of the many victories of the law against criminals and the product solutions that exchanges can use to fight the scams.”.

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