Losses From Crypto Heists Surged 60% To $1.9 Billion In Jan-July: Report

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Losses from crypto hacks surged 60% to $1.9 billion in Jan-July: Report

Losses arising from cryptocurrency hacks jumped nearly 60 per cent in the first seven months of the year to $1.9 billion, propelled by a surge in funds stolen from decentralized finance (DeFi) protocols, according to a blog post from blockchain analysis firm Chainalysis released on Tuesday.

In the same period last year, stolen funds from hacking amounted to $1.2 billion.

DeFi applications, many of which run on the Ethereum blockchain, are financial platforms that enable crypto-denominated lending outside of traditional banks.

Chainalysis noted that the trend is not likely to reverse any time soon, given the $190 million hacking of cross-chain bridge Nomad and $5 million hacking of several Solana wallets already in the first week of August.

"DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it's possible that protocols' incentives to reach the market and grow quickly lead to lapses in security best practices," Chainalysis said in the blog.

Much of the funds stolen from DeFi protocols can be attributed to "bad actors" affiliated with North Korea, especially elite hacking units like Lazarus Group, the US firm wrote.

Chainalysis estimates that so far this year, North Korea-affiliated groups have stolen approximately $1 billion of cryptocurrency from DeFi protocols.

With respect to crypto scams, the blockchain intelligence firm saw a sharp 65 per cent decline through July, in line with the slump in digital asset prices. Total scam revenue in the year to July was $1.6 billion, down 65 per cent from around $4.46 billion in the same period last year.

Scammers may