Crypto crimes on a record high this year: Over $3b stolen so far, $718m in Oct alone

Cybercriminals have set a record this year by stealing cryptocurrencies worth more than $3 billion so far across at least 125 hacks, according to blockchain specialist firm Chainalysis, with approximately $718 million worth of cryptocurrency stolen in October alone.

The $718 million have been stolen from decentralized finance (DeFi) sites across 11 different hacks, tweeted Chainalysis, a US-based company that tracks such data. DeFi sites now stand out as a new preferred target for hackers, representing almost 99 per cent of the total losses from exploits in July to September.

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In 2021, attackers made more than $3.2 billion, the firm added.

DeFi sites targeted

DeFi sites use software-based algorithms to allow cryptocurrency investors to trade, borrow, and lend on digital ledgers without the use of a central intermediary. Hackers have honed their skills at exploiting flaws in the security, coding, and structure of DeFi marketplaces.

“October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go,” the company tweeted.

1/ After four hacks yesterday, October is now the biggest month in the biggest year ever for hacking activity, with more than half the month still to go. So far this month, $718 million has been stolen from #DeFi protocols across 11 different hacks. pic.twitter.com/emz36f6gpK

— Chainalysis (@chainalysis) October 12, 2022

Hacks were already on pace for a record-breaking year by July, but Chainalysis data showed the monthly volume of total illicit activity involving crypto declined during the first half of 2022 as markets slumped.

Change in tactics

Earlier, during last few years, hackers used to attack crypto exchanges. But as the companies have strengthened their security, cybercriminals have now focused their attention on “cross-chain bridges,” which allow investors to transfer digital assets and data to different blockchains.

3/ Back in 2019, most hacks targeted centralized exchanges, and prioritizing security went a long way. Now a vast majority of targets are #DeFi protocols. pic.twitter.com/efSKCkhnm2

— Chainalysis (@chainalysis) October 12, 2022

These bridges store a lot of cryptocurrencies, providing a bigger and more intricate arena for hackers to infiltrate, it added.

“Cross-chain bridges remain a major target for hackers, with three bridges breached this month and nearly $600 million stolen, accounting for 82 per cent of losses this month and 64 per cent of losses all year,” Chainalysis tweeted.

As per a report in CBS News, hackers had initially made off with $570 million in cryptocurrency from Binance, but the losses were minimised to under $100 million, its CEO said last week.

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The cybercriminals also struck Nomad in August, reportedly taking nearly $200 million. Attacks on both the Binance and Nomad attacks instances of hackers exploiting security flaws within the cross-chain bridge transaction protocols, the report stated.