The losses from crypto hacks were up 60% in the first seven months of 2022, now hitting $1.9 billion, according to a blog from Chainalysis — an increase from $1.2 billion at the same time last year.
This was the result of a surge in funds taken from DeFi protocols, which allow for crypto-denominated lending outside a traditional bank. Many DeFi applications run on the Ethereum blockchain.
Chainalysis said this likely won’t improve any time soon, as there have been numerous high-profile hacks going on including the $190 million one of cross-chain bridge of Nomad and numerous big Solana hacks just in early August.
“DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and grow quickly lead to lapses in security best practices,” Chainalysis said in the post.
The company also noted that a large amount of the funds have been attributed to “bad actors” that have to do with North Korea, particularly elite units like Lazarus Group. Chainalysis also estimated that there had been around $1 billion in crypto stolen from DeFi protocols just by groups affiliated with North Korea.
DeFi hacks have been up in general, with repercussions rippling — Nirvana Finance’s NIRV stablecoin has lost its peg after a recent hack when it lost $3.5 million from its treasury.
PYMNTS wrote that this was likely a one-off exploit.
The peg was at 15 cents as of the PYMNTS report in late July, with the ANA token used to maintain it down by 80%.
The report also noted that there’s been $4 billion lost to DeFi hacks, which is an increase from the $3.2 billion lost to centralized crypto hacks, per data from blockchain analytics firm Crystal Blockchain. The data is significant because of DeFi’s fairly recent existence, not having been much of a factor before 2021.
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