3.7 billion Rekt by Crypto Hacks in 2022

In its annual crypto industry security report, blockchain security firm SlowMist reported that hackers stole more than $3.7 billion during 303 hacks in 2022. This total amount, however, is down 61 percent from the crypto funds lost in 2021. The DeFi ecosystem is the most vulnerable, with about 54% of the total losses for the year alone. The report also provides insights into industry efforts to curb money laundering via crypto, thereby denying hackers the ability to profit from stolen funds.

Crypto hacks persist, but decline in 2022

2022 was a very difficult year for the crypto industry. In addition to the long and painful bear market, some major companies in the industry went bankrupt. Still, this did not deter crypto hackers. According to a report by blockchain security firm SlowMist, a total of 303 crypto hacks were recorded in 2022. These hacks resulted in the theft of over $3.7 billion.

The losses from crypto hacks in 2022 are certainly significant. Nonetheless, the $3.7 billion represents a 61 percent decrease from the losses related to crypto hacks the previous year. Indeed, crypto hackers had managed to steal $9.795 billion during 236 hacks in 2021. Thus, we can see that the number of hacks has slightly increased while the amount stolen has significantly decreased.

Number and size of crypto hacks in the last 3 years
Number and size of crypto hacks in the last 3 years

The DeFi sector is very vulnerable to hackers

The SlowMist report also provides insights into which protocols were hacked in 2022. As already mentioned by Chainalysis last October, it appears that the Decentralized Finance ecosystem has been the preferred target of hackers due to its vulnerability. Indeed, it has been affected by 255 crypto hacks out of the 303 recorded in 2022. This represents losses estimated at $2.075 billion or 54% of the amount stolen by crypto hackers in 2022. This vulnerability in the DeFi ecosystem is actually not new. In 2020 and 2021, DeFi had already been a prime target for hackers.

Moreover, other sectors of the crypto industry were also affected by hacks in 2022. These include wallets, exchanges and blockchain protocols, which suffered 10, 11 and 6 security incidents respectively.

Targets of hacks in the last 3 years
Targets of hacks in the last 3 years

Measures to prevent hackers from profiting from stolen funds

The report further revealed that in 2022, some crypto industry operators as well as State regulators have strengthened anti-money laundering measures to prevent crypto hackers from profiting from stolen funds. This fight is especially important as the illicit use of cryptocurrencies has intensified in 2022.

To this end, some crypto industry operators have blocked suspected hacker addresses, and frozen the assets they hold. This is particularly true of Tether and Circle, which blocked 250 and 126 suspected addresses, respectively. In addition, other crypto players have set up a database of addresses suspected of money laundering. This is the case of Chanalysis and SlowMist.

At the level of state regulators, the fight against money laundering has been strengthened in 2022, at least in some countries. In the United States, for example, the Virtual Assets Unit was set up to centralize the Federal Bureau of Investigation‘s response to crypto-based crime. Sanctions have also been taken against groups or individuals accused of hacking or money laundering via crypto. This is notably the case of the Lazarus Group, a North Korean hacker network that was sanctioned in April 2022. Last September, a national network of crypto crime-fighting prosecutors was even launched in the US.

Overall, 2022 has been a tumultuous year for the crypto industry. In addition to the market slowdown, some crypto users have been faced with theft of funds. The good news is that with each passing year, crypto piracy is receding a bit more. That said, it’s still important to better secure your assets by following these tips from Coinpri.