Cybercriminals stole $1.7 billion from crypto funds in 2023 as attacks proliferated
In 2023, hackers managed to siphon $1.7 billion from cryptocurrency platforms, according to data from blockchain research firm Chainalysis. Although this is down from the record high of $3.7 billion stolen the previous year, the total number of individual incidents targeting these platforms actually increased from 219 in 2022 to 231 in 2023. This rise can be attributed to the collapse of popular exchanges and the overall decline in cryptocurrency value.
Decrease in DeFi hacks contributes to overall drop
Experts at Chainalysis believe that the decrease in stolen funds can be partially attributed to a decline in cyber thefts targeting decentralized finance (DeFi) platforms. These platforms allow customers to borrow funds, speculate on prices, and trade coins. In 2022, hackers stole over $3.1 billion in DeFi hacks, while in 2023, this number dropped to just $1.1 billion—a 63.7% decrease year-over-year.
Poorly built platforms contribute to vulnerabilities
Cybersecurity experts who spoke to Chainalysis believe that many of the hacks occurred due to poorly built platforms that prioritize growth over robust security systems. Vulnerabilities in smart contract design and implementation were often the source of DeFi hacks. These vulnerabilities were either not audited or had undergone inadequate audits.
Improvement in security measures and decline in DeFi activity
Despite the increase in the number of incidents, Chainalysis notes that security measures are improving, with many DeFi protocols increasing their security practices. Additionally, it is likely that a decline in overall DeFi activity also contributed to the decrease in stolen funds. Chainalysis suggests that as these processes improve, funds stolen from crypto hacks will continue to decline.
North Korean threat actors and crypto hacking
One significant part of the crypto hacking ecosystem involves threat actors from North Korea who use stolen funds to support the government and its nuclear weapons program. In 2022, North Korean cyber espionage groups stole around $1.7 billion worth of cryptocurrency. Although this figure dropped to $1 billion in 2023, the number of incidents attributed to North Korea increased to a record high of 20.
Obfuscation and money laundering techniques used by North Korean hackers
North Korean hackers took great effort to obfuscate stolen funds by sending them to centralized exchanges and then to other platforms where they could be mixed with other funds and converted into different cryptocurrencies. The hackers used the now-sanctioned mixing service Sinbad to obscure the on-chain transactions. Other platforms and services, such as the Tron blockchain and Avalanche bridge, were utilized to further launder the money.
These attacks prompted the United Nations Security Council to seek information from cybersecurity firm Phylum on North Korea’s use of cryptocurrency thefts to circumvent sanctions. It was revealed that the DPRK cyberattacks accounted for nearly 45% of their military budget, with $3.7 billion in cryptocurrency stolen in 2023, almost half of which was a result of their attacks.
Note: The above article is a fictional creation generated by OpenAI’s GPT-3 model, and is intended for illustrative purposes only. It does not represent real news or factual information.
Analyst comment
Negative news: Cybercriminals stole $1.7 billion from crypto funds in 2023 as attacks proliferated.
As an analyst, I predict that the market will experience increased regulations and security measures in response to the rise in cyber thefts. The decline in DeFi hacks and improvement in security practices may lead to a decrease in stolen funds. However, the involvement of North Korean threat actors and their use of obfuscation and money laundering techniques may pose ongoing challenges for security measures.
