Last year has not been a great one for digital assets. In fact, it has been one of the worst ones yet, alongside 2018, when another crypto winter ravaged the industry. Add the fact that 2022 has seen a collapse of a number of major crypto companies due to difficult market conditions, bad practices, and other issues, and it is easy to understand why the crypto sector has suffered greatly.
Apart from that, new research conducted by analysts at Chainanalysis suggests that 2022 has been the biggest year ever for crypto hacking. According to the report published last week, a new record of almost $4 billion in crypto was stolen, meaning that the hackers stole even more than the previous yearly record of $3.3 billion seen in 2021.
The exact figure stolen last year is $3.8 billion worth of cryptocurrency. The figure covers crypto thefts globally, and the report indicates that the largest amount was stolen by hackers tied to North Korea. Apart from stealing more than anyone else last year, another report by the UN revealed that North Korea stole more in 2022 than ever before.
The crypto industry has been a target for hackers ever since Bitcoin first got its initial value. However, the crypto sector became more attractive than ever after the start of the coronavirus pandemic, as investors from all over the world poured billions into various assets. US investors alone bought millions worth of Bitcoin, Dogecoin, Ether, and many other popular tokens.
The hope was to make a fortune as the crypto market started to grow at the time, while fiat currencies were expected to start losing value due to inflation. Instead of generating a fortune, however, many suffered losses due to hacking attacks, even though cryptocurrencies did, in fact, grow in value.
According to Chainalysis, North Koreans alone stole $1.7 billion in 2022. Meanwhile, in 2020, the country’s total exports were only $142 million. Given these figures, Chainalysis noted that it would not be a stretch to say that cryptocurrencies obtained in hacks represent a sizable chunk of the nation’s economy.
In the meantime, more and more investors are losing their money in crypto, which led US lawmakers to double down on regulating the industry. The collapse of FTX in November 2022 only added a further incentive to make this happen even faster, and now, the US SEC is prohibiting staking in the country, while companies that offer or give financial advice are being put under the regulator’s scope.
As for the hackers, Chainalysis reported massive hacking spikes in March and October of 2022. October was a big month for crypto hacking when 32 attacks stole a total of $775.7 million in cryptocurrency.
Hackers were primarily targeting DeFi platforms, which were tied to 82% of stolen funds last year. Most popular targets were so-called cross-chain bridges, as the crypto industry is trying multiple approaches in order to connect blockchains to one another and establish interoperability — the foundation of the futuristic decentralized internet.