Hackers stole a record $3.8 billion worth of cryptocurrency globally last year, led by thieves linked to North Korea, according to a blockchain analytics firm that tracks cybercrime.
Chainalysis researchers called 2022 โthe biggest year for crypto hackingโ in a report released last week. Thefts increased from $3.3 billion stolen in 2021, the firm reported. Separately, a confidential United Nations report found that North Korea stole more cryptocurrency assets last year than in any other year, Reuters reported on Monday.
During the coronavirus pandemic, US investors poured millions into bitcoin, ether, dogecoin and other popular tokens in the hope of making a fortune. But instead, some investors suffered losses due to hackers, with their digital wallets looted on platforms with poor cyber security.
North Korean cybercriminals โbroke their own annual record for most cryptocurrencies stolenโ and accounted for $1.7 billion in thefts in 2022, according to the Chainalysis report.
Since North Korea's total exports in 2020 totaled $142 million, โit is no exaggeration to say that cryptocurrency hacking is a sizeable part of the nation's economy,โ the researchers added.
As more investors lost money in crypto, US lawmakers have reignited their calls to regulate the crypto industry. The sector scrutiny became even more intense in November when FTX Trading, the third largest crypto platform, suddenly collapsed and filed for bankruptcy.
The number of crypto hacks โebbed and ebbedโ in 2022 with big spikes in March and October, Chainalysis said. October was โthe biggest month in history for cryptocurrency hacksโ with 32 attacks totaling $775.7 million lost, according to the report.
Hackers have focused their activities on decentralized finance, or DeFi, platforms, which were linked to 82% of stolen funds last year, Chainalysis said. Criminals often attack when crypto investors use so-called "cross-chain bridging" to transfer funds from one blockchain to another.
The biggest hack of October took place when someone looted $586 million worth of crypto from a cross-chain bridge owned by Binance. The company recognized the attack, saying his security officers "were able to minimize the loss."
Bad actors can exploit DeFi platforms because some cryptocurrency companies have not prioritized security, said David Schwed, COO of blockchain security firm Halborn.
"A large protocol should have 10 to 15 people on the security team, each with a specific area of โโexpertise," Schwed said in the Chainalysis report. "The DeFi community generally doesn't demand better security; they want to go to protocols with high returns. But those incentives lead to problems down the road."
