Report: Record $3.8B in Cryptocurrency Stolen in 2022

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Facts

  • Cryptocurrency theft was at its worst in 2022, with hackers stealing upwards of $3.8B, according to a report released Wednesday by Chainalysis, a crypto blockchain analytics firm.
  • The stolen amount increased by a half billion dollars from 2021's totals and came as the overall crypto market declined significantly, with Bitcoin falling 60% last year. North Korean hackers allegedly stole a record $1.7B in crypto, up from $429M in 2021.
  • DeFi ["Decentralized Finance"] platforms were reportedly the primary target of hackers, who used cross-chain bridges and blockchain infrastructure as their main methods of theft, accounting for more than 82% ($3.1B) of the crypto stolen.
  • The report also said that hacking "ebbed and flowed," though October was the worst month for crypto theft, recording $775.7M stolen in 32 separate attacks. The combination of the volatile market and rising rates of hacks left investors with large losses and regulators calling for more consumer protection.
  • DeFi platforms, which were created in an attempt to replace traditional banks by allowing users to exchange assets directly via blockchains, are prime targets because they typically hold large reserves of types of crypto coins.
  • As North Korea faces sanctions and monitoring from the likes of the US and UN, it's believed to be using crypto hackers to obtain money for its missile and nuclear weapons program. But beyond state-sponsored hacks, Chainalysis also said 2022 saw a record amount of crypto transactions used for many types of illicit activities, reaching a total of $20.1B.

Sources: Reuters, CNN, Benzinga, and Inquirer.net.

Narratives

  • Pro-establishment narrative, as provided by Economy Middle East. Although DeFi platforms are popular because of their transparent nature, they’re also vulnerable to major hacks. North Korean hackers have abused these vulnerabilities and have popularized the switch from attacking mainstream crypto platforms to focusing on unguarded decentralized ones. DeFi platforms need to strengthen their security through measures including third-party audits.
  • Establishment-critical narrative, as provided by The Street. Governments spying on average citizens is coming disguised as cyber security against threats from US adversaries, including North Korea and Russia. Canada was able to do this when it regulated cryptocurrency during last year’s trucker protests, setting an example for other countries. Financial autonomy is tough in a surveillance state.