Crypto hackers target DeFi and bridges in 2022

A Forbes report citing data from blockchain analysis indicates that Defi (decentralized finance) platforms and vulnerable cross-blockchain bridges attracted hacking and crypto robbery attempts this year.

Chainalysis data shows that over $3 billion worth of cryptocurrencies were stolen with a total of 125 hacking attempts. Nearly half of these came from just five thefts, and these were from Defi platforms. Another target was vulnerable bridges, that allow transferring coins from one blockchain to another. These bridges need to store the transaction amounts in temporary addresses and accounts, and these become targets for hackers. Data from Elliptic reveals that 70% of thefts were from such bridges, with total amount close to $2 billion.

Interestingly, the FTX collapse has recently led to crypto flowing out of centralized exchanges into cold wallets, from where the most likely destinations are DeFi platforms. Institutional investors are a majorly withdrawing their funds into cold wallets.

Wallets with multi-signature features were another target. Use of multi-signature allows several people to control and make decisions, removing any single point of failure. Forgetting private keys or losing them is thus not a fear, and such accidents can be avoided. However, this also creates more opportunities for hackers, as in the case of hacks of Harmony and Ronin Network.

Here are the top ranking crypto robberies of 2022:

Ronin Network
Blockchain NFT video game platform for Axie Infinity
Amount stolen: $625 million

Wormhole Network
Bridge for crypto and NFTs
Amount stolen: $325 million

Amount stolen: approximately $190 million

Beanstalk Farms
Stablecoin project. (A “flash loan” feature was exploited to get many loans within seconds)
Amount stolen: $182 million

London-based crypto exchange. (Brute force computation to crack passwords of vanity addresses)
Amount stolen: $160 million

Mango Markets
Solana-based decentralized crypto exchange.
Amount stolen: $112 million

Binance’s BSC Token Hub
Bridge. (Hackers were able to create approval messages for withdrawals)
Amount stolen: $110 million

Harmony Horizon Bridge
Amount stolen: $100 million

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