Thursday, Oct 06, 2022
Outlook Money

DeFi Platforms Becoming Favourite Hunting Ground For Crypto Thieves And Hackers

In the first three months of 2022, crypto currency worth $1.3 billion have been stolen from exchanges, platforms and investors, of which 97 per cent was stolen from DeFi platforms

Hackers and internet criminals on the lookout for the next big crypto theft have turned their attention to decentralised platforms.

Decentralised platform have become the favourite hunting ground for hackers and online thieves prowling for the next big crypto heist.

In the first three months of 2022, crypto currency worth $1.3 billion have been stolen from exchanges, platforms and investors. Of this, a whopping 97 per cent was stolen from decentralised finance (DeFi) platforms. In 2021 and 2020, about 72 per cent and 30 per cent were stolen from DeFi platforms, respectively.

According to a Chainalysis report, crypto worth $5.2 billion could be stolen in 2022 as compared to $3.2 billion stolen in 2021.

Earlier on March 23, 2022, unidentified hackers had stolen around 173,600 Ether tokens and 25.5 million USD Coin tokens, funds totalling about $615 million, from Blockchain Company Ronin.

Ronin said in its blog post that the hacker had used stolen private keys and the passwords needed to access crypto funds to make off with the funds. However, “most of the hacked funds are still in the hacker's wallet”, Ronin had said in the post. This was one of the biggest crypto heists of the year.

Click here to read more about the Ronin crypto heist

Also, according to the Crystal Blockchain report published in December 2021, there were 115 security attacks, 40 attacks on DeFi protocols, and 26 fraudulent, which resulted in the theft of approximately $10 billion worth of crypto assets in 2021. 

According to the report, 2021 recorded the highest crypto-asset theft, with assets more than $10 million being stolen. Also DeFi hacks had become the most popular way to steal crypto in 2020-2021, and the total amount of stolen virtual assets in crypto being stolen through DeFi hack had doubled in this period.

The emergence of rug pulls, a relatively new scam type facilitated the growing DeFi hacks, reported Chinanalysis.

Click here to read more about the report

According to experts, almost all cryptocurrency hacks are the result of security breaches in which hackers gain access to private keys of the victims. 

DeFi thefts, are however, more sophisticated as they target specific bugs in software that hackers spend hours scanning over. The fact that DeFi is decentralised and very transparent makes them more susceptible to this hacking as the apps are open source.