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When it comes to cybercriminals stealing money from cryptocurrency companies and protocols, 2022 was the worst year ever.
A report (opens in new tab) of Chainalysis claims that $3.8 billion worth of various tokens were stolen in 2022.
Drilling deeper throughout the year, the analysts found major spikes in March and October, with the latter becoming the biggest month for crypto theft on record. That month, a total of 32 separate attacks took place, leaving businesses $775.7 million short.
Lazarus Group dominates
Most of the attacks involved hackers following decentralized finance (DeFi) protocols.
The trend, which started in 2021, continued into 2022, with DeFi protocols accounting for 82.1% of all crypto hacking incidents last year (up from 73.3% the year before). All in all, $3.1 billion was stolen, two-thirds (64%) of which came from cross-chain bridge protocols.
Numerous hacking groups were involved, but one particular group stands out as the worst performing group: North Korea’s Lazarus Group. This group is said to have strong ties to the country’s government and is apparently using the money stolen in crypto hacks to fund the country’s nuclear weapons program.
By 2022, the group amassed an estimated $1.7 billion in various cryptocurrency tokens, raising $1.1 billion from DeFi protocols alone.
Chainalysis tried to illustrate the group’s power by saying North Korea exported a total of $142 million worth of goods in 2020.
But the problem with these hacks is that Lazarus Group usually ends up with large amounts of illiquid tokens, which they first have to exchange for more liquid tokens. To do that, they move the tokens to other DeFi protocols and only then move them to mixers – crypto projects that scammers usually use to launder money.
Still, law enforcement is fighting back, researchers say, recalling $30 million in cryptocurrency last year (opens in new tab) stolen in the Axie Infinity Ronin Bridge hack has been recovered. “We expect more stories like this in the coming years, largely due to the transparency of the blockchain,” the researchers conclude.