Despite their fall this year, cryptocurrencies continue to be a digital cash cow for one influential group: hackers.
According to blockchain expert Chainalysis Inc., at least $718 million has been stolen so far in just October, pushing the total for the year beyond $3 billion and putting 2022 on track to set a record for the total value of hacks.
The majority of the targets are so-called decentralized finance protocols, or DeFi, which use software-based algorithms to let cryptocurrency investors trade, borrow, and lend on digital ledgers without the use of a central middleman.
Hackers have been good at finding and taking advantage of holes in the code, security, and organization of DeFi markets. Given that DeFi is regarded as crucial for the adoption of cryptocurrencies, this puts the onus on crypto players to provide solutions.
According to Chainalysis’ tweet on Thursday, “October is now the greatest month” for hacking activity in 2022, and it also noted that bridges connecting blockchains are a significant weakness.
One included a hacker who stole around $100 million from the DeFi service Mango by influencing the token’s price. The criminal destroyed all of the platform’s depositors in the process.
2 million Binance Coins, worth around $570 million, were effectively created and seized by a hacker last week. A statement from Binance claims that the remaining money was blocked and that just about $100 million was not retrieved.
DeFi systems are increasingly being hacked by governments. Chainalysis predicted earlier this year that organizations connected to North Korea had taken almost $1 billion in cryptocurrency through DeFi protocols.
