Crypto Hacks Are Declining In Numbers But Increasing In Damage

Research showed that the average dollar amount stolen in crypto hacks this years is more than double what it was in 2021.

Since the start of the year, there have been much fewer cryptocurrency hacks. The industry had 64 security breaches by mid-June, according to the most recent research from BestBrokers, a significant decrease from the 251 intrusions that occurred previous year.

Even if there have been fewer successful hacks, the harm they have caused to the sector hasn’t diminished. According to data, the average value stolen in a cryptocurrency attack climbed by 206% from the average in 2021.

Crypto hacks seem to be aiming for quality, not quantity

Approximately $3.2 billion worth of cryptocurrency was stolen in total through 251 hacks in 2021, according to research provided to CryptoSlate. Around $1.7 billion has been stolen in just 65 security breaches this year as of mid-June, according to the sector.

“Even though the number of crypto-related hacks is dropping sharply in 2022, this is not affecting the total dollar amounts stolen, in spite of the dropping crypto prices this year,”

The report said

The latest data from Chainalysis showed that the average amount stolen per crypto hack this year is $26.6 million – a 206% increase compared to the 2021 average of $12.9 million. This number becomes even higher compared to the 2020 average of $4.7 million stolen per hack, representing a 465.9% increase.

Researchers think that in 2022, hackers targeted and successfully attacked bigger targets. Since hackers can typically profit the most from decentralized protocols, the DeFi market appears to be one of their preferred targets.

Around 72% of all cryptocurrency thefts in 2021 were a result of DeFi protocols and services. This year, this proportion rose to an astounding 97%.

A considerable amount of venture capital money has been poured into the market, according to Robert Hoffman, a cryptocurrency analyst at BestBrokers, and this has made DeFi the main target for hackers. Because of the market’s intense competition, protocols that go live first will have the best chance of success.

“The race for building the digital financial system of the fourth industrial revolution is an extremely rapid one with many stakeholders competing for the first spot. Often when the time to market is too short it results in compromised aspects of the product, including security,”

Hoffman explained

The technical nature of smart contracts and the expertise required to program them leaves a lot of room for manipulation. However, Hoffman believes that once DeFi becomes more mainstream, most of its security issues will be resolved “as with any new technology that gets mass adoption.”

DISCLAIMER: The Information on this website is provided as general market commentary and does not constitute investment advice. We encourage you to do your own research before investing.

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