Last year marked the worst year on record for cryptocurrency hacks, according to Chainalysis’ latest analysis. Cryptocurrency hackers stole $3.8 billion in 2022, according to the blockchain analytics firm’s report — up from $3.3 billion in 2021. October had the most crypto hacks in a single month with $775.7 million stolen in 32 separate attacks, according to the study. Decentralized finance protocols, known as DeFi protocols, accounted for about 82%, or $3.1 billion, of all crypto stolen by hackers in 2022, according to the report. DeFi protocols contain a series of codes that determine how virtual currency can be used on a blockchain network. Take smart contracts, for example. These digital contracts are the key underlying technologies that allow crypto transactions to be made. Smart contracts operate according to “if/then” commands; if X, then execute Y. Within DeFi, smart contracts are publicly viewable sets of instructions that allow users to borrow, lend or make transactions without an intermediary. Once a user meets the smart contract’s terms and conditions, the transaction happens automatically, similar to a vending machine. The majority of the digital funds were stolen from cross-chain bridge applications, according to the report. This software allows users to transfer their cryptocurrency between different blockchains.
Full report : Crypto investors lost nearly $4 billion to hackers in 2022.
While these are the cryptocurrency hacks that have happened in 2022, OODA has been compiling a comprehensive Web3 incident database since the dawn of Web3 based on our research to categorize what compromises are taking place as well as document the root causes that plague Cryptos, DeFi, NFTs, and Web3 in general. Tracking root causes provides comprehensive insights into how innovators can create robust cyber risk management approaches and reduce the potential for consequential attacks. You can access the OODA comprehensive Crypto Incident tracker here.
