In 2024, the cryptocurrency sector experienced a significant increase in hacking incidents, with losses escalating by 21% to reach $2.2 billion, according to a recent Report by blockchain analysis firm Chainalysis. This marks the fourth consecutive year where losses have exceeded $1 billion, underscoring the persistent vulnerabilities within the digital asset ecosystem.
The number of crypto hacks incidents also saw an uptick, rising from 282 in 2023 to 303 in 2024. This surge in crypto heists coincided with a substantial appreciation in Bitcoin’s value, which soared by 140% to surpass the $100,000 threshold. The increasing valuation of cryptocurrencies appears to have made the sector an even more attractive target for cybercriminals.
In 2024, a prominent cryptocurrency hack linked to North Korea targeted the Japanese exchange DMM Bitcoin, resulting in the theft of approximately 4,502.9 Bitcoin, valued at $305 million. The breach exploited vulnerabilities within DMM’s infrastructure, allowing attackers to execute unauthorized withdrawals. In a swift response, DMM Bitcoin assured customers that their deposits were safe by sourcing equivalent funds with the support of its group companies to cover the losses.
A significant portion of the stolen funds has been attributed to compromised private keys, particularly targeting centralized platforms. Notable incidents include the theft of over $305 million from Japan’s DMM Bitcoin in May and $235 million from India’s WazirX in July. These breaches highlight the critical importance of securing private keys, which control access to users’ assets.
“In our mid-year crime update, we noted that cumulative value stolen between January 2024 and July 2024 had already reached $1.58 billion, approximately 84.4% higher than the value stolen over the same period in 2023.” Reads part of the report.
North Korean-linked hacking groups have been particularly active, with their crypto-related thefts more than doubling from the previous year to a record $1.3 billion in 2024. The United Nations has indicated that North Korea utilizes cryptocurrency to circumvent international sanctions, with stolen funds potentially financing weapons of mass destruction and ballistic missile programs. The country, however, routinely denies involvement in cyber hacking or crypto heists.
The rise in crypto hacks presents a formidable challenge for the industry, especially in combating fraud. As the digital asset market continues to expand, the illicit use of cryptocurrencies is expected to grow in tandem. Addressing these crimes will undoubtedly be a key focus for the industry in the coming year.
The Chainalysis report also notes a shift in the focus of attacks from decentralized finance (DeFi) platforms to centralized services. While DeFi platforms were the primary targets in previous years, centralized services became more prominent targets in the second and third quarters of 2024. This shift underscores the evolving strategies of cybercriminals and the need for all platforms to bolster their security measures.
“In terms of amount stolen by victim platform type, 2024 also saw interesting patterns. In most quarters between 2021 and 2023, decentralized finance (DeFi) platforms were the primary targets of crypto hacks. It’s possible that DeFi platforms were more vulnerable because their developers tend to prioritize rapid growth and bringing their products to market over implementing security measures, making them prime targets for hackers.” Chainalysis stated.
In response to the increasing threat, industry stakeholders are urged to implement robust security protocols, including the safeguarding of private keys and the use of advanced monitoring systems to detect and prevent unauthorized access. Collaborative efforts between platforms, regulators, and cybersecurity firms are essential to mitigate the risks associated with cryptocurrency hacking.
As the cryptocurrency market matures, the balance between innovation and security remains delicate. The industry’s ability to address these challenges will play a crucial role in its long-term sustainability and the protection of investors’ assets.
Do you have any story or press releases you want to share? Send tips to editor@envestreetfinancial.com
Follow us on Twitter, Facebook, or LinkedIn to ensure you don’t miss out on any