Crypto Hackers Bagged $2B This Year as Exploits Jumped 58%: Report

Chainalysis Found DeFi ‘Uniquely Vulnerable’ to Exploits

Crypto may be slumping but it’s a bull market for hackers and other bad actors who stole $1.9B worth of assets from projects this year, according to a report released this week by Chainalysis.

That marks a 58% jump in the ill-gotten gains, the blockchain analysis group found. Almost all of the crypto assets stolen in the first quarter were taken from DeFi protocols compared to 72% in 2021. 

Bright Spot

The surge in exploits poses a critical test for decentralized finance. The industry is striving to overcome the bear market and establish its protocols as a viable alternative to traditional finance. If protocols cannot safely protect their customers’ assets then it’s safe to say its brand as a truly innovative proposition will be tarnished.

The one bright spot in the report was a 15% drop in crypto scams. The decrease may be driven by falling crypto prices, which make fraudulent schemes less enticing. In a bear market, new and inexperienced users tend to be more cautious when presented with a promise of quick returns.

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The surge in hacks is sure to be worrisome for project founders and users. The total figure lost would have been more than $2.1B if the $190M hack of the Nomad cross-chain bridge and the $5M exploit of Solana wallets from earlier this month had been included.

DeFi protocols’ tendency to use open source code make them  “uniquely vulnerable” to hacking because cybercriminals can look for weaknesses, the report said. The use of incentives also prompts lapses in best practices when it comes to security.