Despite their crash in 2022, cryptocurrencies are a digital cash cow for one influential group: hackers.
According to blockchain expert Chainalysis Inc., at least $718 million worth of crypto assets has been hacked and taken away so far in just a month of October this year, pushing the total crypto hacking price for 2022 to more than $3 billion and pitting the year to be on track to become a record year in terms of the total value of hacks.
Most targets are the so-called decentralized finance protocols, or DeFi, which use software-based algorithms to let cryptocurrency investors trade, borrow, and lend on digital ledgers without using a central intermediary.
Hackers are skilled at finding flaws in the coding, security, and structure of DeFi marketplaces.
DeFi is crucial for adopting
cryptocurrencies, which burdens crypto players to discover alternatives.
According to Chainalysis on Twitter, “October is now the biggest month” concerning successful crypto hacking in 2022. It also noted that bridges between blockchains are a significant vulnerability.
Two significant exploits have recently shaken up the crypto industry. One involved a hacker who stole about $100 million from the DeFi service Mango by influencing the token’s price. The perpetrator destroyed all of the platform’s depositors in the process.
Two million Binance Coins, worth roughly $570 million, were effectively created and taken by a hacker last week. A statement from Binance claims that the remaining money was frozen and that only about $100 million was not recovered.
Governments are increasingly hacking DeFi platforms. Chainalysis predicted earlier this year that organizations connected to North Korea had taken about $1 billion in cryptocurrency from DeFi protocols.