Cryptocurrencies may have crashed this year, but they remain a digital ATM for one powerful constituency: hackers.
Cryptocurrencies may have crashed this year, but they remain a digital ATM for one powerful constituency: hackers.
At least $718 million has been stolen so far in October alone, taking the gross amount for the past year to $3 billion and putting 2022 on track to be a record total value hacked, according to blockchain specialist Chainalysis Inc.
Most of the targets are so-called decentralized financial – or DeFi – protocols, which deploy software-based algorithms to enable crypto investors to trade, borrow and lend on digital ledgers without using a central intermediary.
Hackers have become adept at exploiting weaknesses in the security, encryption, and structure of DeFi marketplaces. That puts the responsibility on crypto players to find solutions, as DeFi is touted as important for crypto adoption.
“October is now the biggest month” for hacking activity in 2022, Chainalysis said on Twitter on Thursday, adding that bridges between blockchains are also a major vulnerability.
Two major exploits have rocked the crypto sector in recent days. One of these was a heist where a hacker took about $100 million from DeFi service Mango by manipulating the price of his token. The perpetrator destroyed savers on the platform.
Last week, 2 million Binance Coins – equivalent to nearly $570 million – were effectively minted and taken by a hacker. About $100 million was not recovered, while the rest was frozen, according to a statement from Binance.
DeFi platforms have become a frequent target of state-sponsored hacking. Earlier this year, Chainalysis estimated that North Korea-affiliated groups stole about $1 billion worth of crypto from DeFi protocols.
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