The Dark Side of Decentralized Finance: North Korean Hackers Steal $1.7 Billion in Cryptocurrency in 2022!

by | Feb 9, 2023 | Cryptopedia, DeFi, DeFi101, News | 0 comments

Cryptocurrency has been one of the hottest topics in the financial world in recent years, with more and more people investing in digital currencies. However, as the popularity of cryptocurrencies has increased, so too has the number of hacking incidents. In 2022, a record $3.8 billion worth of cryptocurrency was stolen, with much of the theft driven by North Korean-linked hackers, according to a report by blockchain analytics firm Chainalysis. The North Korean hackers stole an estimated $1.7 billion worth of cryptocurrency through various hacks in 2022, up from $429 million in 2021.

In addition to hacking cryptocurrency firms, suspected North Korean hackers have posed as other nationalities to work at such firms and send the stolen money back to Pyongyang, US agencies have warned. The decentralized finance (DeFi) industry has become the main target of hackers, accounting for more than 80% of all cryptocurrency stolen in 2022. DeFi protocols replace traditional financial institutions with software that allows users to transact directly with each other via the blockchain, the digital ledger that underpins cryptocurrencies.

Of the attacks on DeFi systems, 64% targeted cross-chain bridge protocols, which allow users to exchange assets between different blockchains. Bridge services typically hold large reserves of various coins, making them attractive targets for hackers. The thefts on Axie Infinity and Harmony were both bridge hacks, highlighting the vulnerability of these systems to cyber-attacks.

Also Read: Axie Infinity recovers stolen cryptocurrency

The rise of North Korean hackers to cryptocurrency hacks is a threat to the DeFi industry, which is still in its early stages of development. While DeFi offers numerous benefits over traditional finance, such as greater transparency and accessibility, it is also more susceptible to security threats. Hackers are attracted to DeFi because of the large amounts of cryptocurrency that are stored in these protocols.

To address the security concerns in the DeFi industry, it is crucial that DeFi protocols implement robust security measures to prevent hacks and protect users’ funds. This includes implementing multi-signature security, ensuring that user funds are stored in secure, decentralized wallets, and implementing regular audits of the system.

Also Read: How to stay safe from crypto hacks this year?

The rise of North Korean-linked cryptocurrency hacks is a growing concern for the DeFi industry and we all must be very careful of these hacks. As the popularity of DeFi continues to grow, it is essential that DeFi protocols implement robust security measures to protect users’ funds and ensure the long-term viability of the DeFi industry. While the DeFi industry offers numerous benefits over traditional finance, security must be a top priority if DeFi is to reach its full potential.

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