"Hackers Lifted $3.8 Billion From Crypto Investors in 2022"

According to researchers at Chainalsyis, hackers stole $3.8 billion from crypto investors in 2022, a 13% increase from 2021 and marking a new all-time high for the annual theft of digital coins.  This rise in crypto hacks is just the latest indicator to underscore how security within the digital asset market, especially Decentralized Finance (DeFi), remains a significant obstacle for the industry.  The researchers stated that DeFi protocols accounted for 82% of all crypto stolen by hackers, up 9% from 2021.  The researchers noted that a newer part of the crypto industry, DeFi relies on programmable software known as smart contracts, which, when used on a public blockchain, generally offer more transparency at both the code and transaction level than the rest of crypto.  With a total of $53.7 billion in capital held within DeFi protocols, this newer and less regulated side of digital finance accounts for only 5% of all the money in crypto.  The researchers also found that hacks on software applications known as cross-chain bridges, which allow users to move digital assets from one blockchain to another, made up 64% of the year's stolen funds.  The researchers noted that to enable crypto users to port assets from one blockchain to another, bridges lock a user's assets into a smart contract on one blockchain, then mint an equivalent asset on another chain in a transaction similar to a foreign currency exchange.  However, this procedure also makes these moves highly vulnerable to exploits.  The researchers stated that bridges are an attractive target for hackers because the smart contracts, in effect, become huge, centralized repositories of funds backing the assets that have been bridged to the new chain.  The researchers noted that if a bridge gets big enough, any error in its underlying smart contract code or other potential weak spot is almost sure to eventually be found and exploited by bad actors.  As for who made off with the majority of stolen funds last year, the researchers point to North Korea-linked hackers, such as the notorious Lazarus Group.  Through 2022, Chainalysis attributes North Korea-linked hackers as having swiped $1.7 billion, or 45% of total funds lost in crypto exploits. 

Yahoo Finance US reports: "Hackers Lifted $3.8 Billion From Crypto Investors in 2022"