As a result of a surge in funds stolen from decentralized finance (DeFi) protocols, cryptocurrency hacks lost nearly 60% of their value in the first seven months of the year, according to Chainalysis, a blockchain analysis firm. $1.2 billion was stolen by hackers in the same period last year.
Blockchain-based DeFi applications enable crypto-denominated lending outside traditional banks, many of which run on the Ethereum blockchain.
In the first week of August, several Solana wallets were hacked for $5 million each, and $190 million was stolen from cross-chain bridge Nomad.
It’s possible that protocols’ incentives to reach the market and grow rapidly lead to lapses in security best practices, Chainalysis said in its blog. DeFi protocols are particularly vulnerable to hacking due to their open source code that cybercriminals can study ad nauseum in search of exploits. Especially elite hacking units such as Lazarus Group are responsible for much of the money stolen from DeFi protocols, the U.S. firm reported.
According to Chainalysis, a North Korea-affiliated group has stolen approximately $1 billion in cryptocurrency from DeFi protocols so far this year.
As digital asset prices slumped, the blockchain intelligence firm saw a 65% decline in crypto scams through July. There was a 65% drop in scam revenue from the same period last year to $1.6 billion in the year to July.
Fraudulent crypto coins or tokens may be offered by scammers pretending to be legitimate businesses.
In an email to Reuters, Kim Grauer, Chainalysis’ director of research, said scams were down primarily due to the crypto downturn, but also due to many law enforcement wins against scammers.
At the end of Thursday, CoinGecko estimated the crypto market capitalization at $1.1 trillion, down over 50% from around $2.35 trillion at the beginning of the year.
In the last few months, bitcoin has slumped roughly 48% in price and has been hovering between $20,000 and $24,000.
As bitcoin’s price has fallen since January 2022, scam-related proceeds have fallen along with it.
The cumulative number of individuals transferred to scams in 2022 was the lowest in four years, not only in terms of proceeds, but also as a result of the decrease in proceeds from scams.
According to Chainalysis, “fewer people are falling for cryptocurrency scams than ever before.”
Cryptocurrency scams are less appealing to potential victims as asset prices fall because they typically present themselves as passive crypto investing opportunities with enormous returns.”
Via this site
