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Number of crypto hacks decreases, but damage dealt increases

 


The number of cryptocurrency hacks has decreased significantly since the beginning of the year. According to the latest BestBrokers study, the industry had seen 64 security breaches through mid-June -- a sharp drop from last year's 251 hacks.


While the number of successful hacks has decreased, the damage they have done to the industry has not. Data shows that the average amount stolen per crypto hack has increased by 206% compared to the 2021 average.


Hacks seem to aim for quality, not quantity

According to the shared research, there were a total of 251 hacks in 2021 that stole around $3.2 billion in cryptocurrencies. This year, as of mid-June, around $1.7 billion was stolen in just 65 security breaches.


“Even though the number of cryptocurrency-related hacks is down sharply in 2022, this is not impacting the dollar amounts stolen, despite falling crypto prices this year,” the report states


The latest data from Chainalysis shows that the average amount stolen per crypto hack this year is $26.6 million -- a 206% increase from the $12.9 million average last year Year 2021. This figure is even higher compared to the average of $4.7 million stolen per hack in 2020, a 465.9% increase.



The analysts believe that in 2022, the hackers aimed at bigger targets and successfully hit them. The DeFi market seems to be a popular target for hackers as they can generally make the biggest profits with decentralized protocols.


Around 72% of all cryptocurrencies stolen in 2021 were attributed to DeFi protocols and services. This year, that percentage rose to a staggering 97%.


Robert Hoffman, a cryptocurrency analyst at BestBrokers, said that DeFi has become the main target for hackers due to the large amount of venture capital that has poured into the market. The competition in the market means that the protocols that hit the market first have the greatest chance of success.


“The race to build the digital financial system of the fourth industrial revolution is extremely fast, with many players competing for first place. When time to market is too short, aspects of the product, including safety, are often compromised,” explained Hoffman.


The technical nature of smart contracts and the expertise required to program them leave a lot of room for manipulation. However, Hoffman believes that most security issues will be resolved once DeFi becomes mainstream, “as with any new technology that is deployed en masse.

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