Report: In the first seven months of the year, bitcoin hacking losses increased by over 60% to $1.9 billion.
According to a blog post published on Tuesday by blockchain analysis company Chainalysis, losses from cryptocurrency breaches increased by about 60% in the first seven months to $1.9 billion, driven by a rise in money stolen through decentralized finance (DeFi) protocols.
The amount of money taken through hacking over the same time period last year was $1.2 billion.
DeFi apps are financial platforms that allow lending in cryptocurrencies outside of conventional banks, with many of them running on the Ethereum blockchain.
In the blog post, Chainalysis stated that “DeFi protocols are particularly vulnerable to hacking, as their open source code can be studied in-depth by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and proliferate lead to lapses in security best practices.”
According to the US company, elite hacker groups like Lazarus Group and other “bad actors” connected to North Korea are responsible for much of the money taken via DeFi protocols.
Scammers may pose as reputable companies and sell fake crypto coins or tokens.
According to Kim Grauer, head of research at Chainalysis, “Scams are down partly due to the crypto slump, but also due to the many law enforcement successes have taken against scammers and the product solutions that exchanges may employ to counter scamming.”
According to CoinGecko, the market value of cryptocurrencies as of late Thursday was $1.1 trillion, a decline of more than 50% from the $2.35 trillion record at the start of the year. Bitcoin’s price has fallen by about 48% so far this year, and in recent months it has been ranging between $20,000 and $24,000.
According to Chainalysis, scam-related earnings have decreased along with the price of bitcoin since January 2022. In addition to a decline in scam revenues, 2022 saw the fewest total individual transfers to scams over the previous four years.
According to the analysis from Chainalysis, “such figures show that fewer individuals than ever are falling for bitcoin frauds.”
One explanation for this may be because, with asset values declining, cryptocurrency scams, which often promote themselves as passive crypto investment possibilities with high promised returns, are less alluring to potential victims.
