One of the key selling points of blockchain is its security. The technology’s decentralised nature should make it resistant to tampering and fraud. However, as with any technology, blockchain is not immune to hacking.
According to the data collected by the Atlas VPN team, blockchain hackers stole over $3.5 billion worth of cryptocurrencies in 2022. Blockchain bridges lost $1.2 billion worth of cryptocurrencies in just 16 events. The Ronin Network sidechain bridge suffered the biggest hack of the year, as the attacker walked away with $610 million.
Furthermore, the BSC ecosystem lost over $870 million in 76 attacks or scams in 2022. The Ethereum ecosystem is not far behind, with 49 events resulting in losses of more than $500 million in cryptocurrencies.
Other crypto-related projects and people were victims of 48 hacks, causing nearly $370 million in losses.
In addition, it is worth mentioning that while we don’t include the FTX collapse that lost more than $8 billion of its customers’ money, it is considered a fraudulent exchange by most crypto experts.
Cybersecurity writer at Atlas VPN, Vilius Kardelis, shared his thoughts on blockchain hacks: “As the use of blockchain technology continues to grow and become more mainstream, we can expect to see a corresponding increase in the number of hacking attempts targeting these systems.”
Blockchain hacks are on the rise
Despite the fall of the crypto market in 2022, cybercriminals are still targeting blockchain networks and exchanges for their financial gain.
In 2022, cybercriminals and scammers caused a total of 301 blockchain incidents. Last year hacks rose by 27% compared to 2021, when researchers registered 237 blockchain events.
The first quarter of 2022 started strong with 79 blockchain incidents, the most recorded in a quarter at that time. However, in the second quarter, hacks were up by 24% and reached new heights at 98 events.
But there’s good news too. Due to the fallen prices of most crypto, blockchain hacks have dipped significantly to 56 events in the third quarter, a 43% drop compared to Q2. But while the crypto market is still down, blockchain hackers and scammers came back with more schemes in the last quarter of the year, with 68 incidents and more than $1 billion in stolen profit.
What is driving the interest from hackers in blockchain?
- Many DeFi projects continue to have inadequate levels of security testing before they go live
- A significant amount of projects are exploring cross-chain bridges, which are a prime target
- Hackers are getting better at what they do, making it hard to stay ahead of the bad actors
- Blockchain developers don’t read up on previous hacks, repeating vulnerabilities
For investors in cryptocurrency, the watchword remains one of moving with extreme care in this market. The big lesson learned in 2022 was not to store assets on-exchange. Wherever possible, if not actively trading, keep your cryptocurrency assets in a cold wallet or with some form of independent custodian that has a Tier 1 regulator.