According to a Chainalysis report released earlier last week, over $3.8 billion was stolen from crypto in 2022 – and 45% of that loot was traced to North Korean hackers.
The report, which broke down crypto’s terrible losses, highlighted the month of March and October as peak periods with an alarming record amount of hack attacks — ~55 separate hacks, totalling $1.4 billion, in 2022. November and February followed closely at $531 million and $430 million, respectively.
Over the last four years, the amount of funds stolen from aggregated hacks has sextupled, leaving many questions on crypto’s investment in security. Surprisingly, there were fewer hacks in 2022 (>200 hacks and $3.8 billion stolen) than in 2021(>200 hacks and $3.3 billion stolen).
North Korea leads the heist pack
Chief among the major North Korean-based hackers is Lazarus, a 12-year-old largely obscure hacker group also popularly known as Guardians of Peace, allegedly run by the government of North Korea and responsible for a significant number of national cyberattacks across the world.
Lazarus, together with other lesser-known hack syndicates, siphoned the global crypto market of $1.7 billion in the year 2022, smashing their personal year-on-year record by ~ $1.2 billion. The heist is significant because it represents ten-fold the total export income realized by the socialist nation in 2020.
Such stolen funds have been central to advancing nuclear weapon activities in the socialist state, many experts believe.
DeFi hardest hit
DeFi suffered the largest losses across all sectors. Chainalysis pegs its total loss in 2022 at $3.1 billion, representing 82.1% of all crypto losses in 2022. Within the DeFi ecosystem, cross-chain bridge protocols —the interoperability arm of the system designed to move cryptocurrencies across blockchains— were the primary target of most hacker exercises.
Following the clampdown of the popular crypto mixer platform, Tornado.cash by the US government in August 2022, hackers turned to Sinbad, a relatively new protocol similar to tornado cash, to continue their illicit activities. The platform received approximately 1,429.6 Bitcoin worth approximately $24.2 million over the last two months.
From the analysis, transparency, which is continually hailed as one of crypto’s greatest strengths, is starting to become exploited as a major weakness. Chainalysis had proposed security testing, external auditing, and the use of circuit breaker features as helpful solutions for ailing DeFi.