In 2024, cryptocurrency theft reached alarming levels, with over $2.2 billion (A$3.5 billion) worth of digital assets stolen—a 21% increase compared to the previous year. This marks the fourth consecutive year that thefts of more than $1 billion have been reported, according to a Chainalysis report. The total number of individual hacking incidents also rose, reaching 303 by year-end, up from 282 in 2023.
The surge in crypto thefts correlates with rising adoption and growing cryptocurrency market prices, as noted by Chainalysis: “As crypto adoption and prices rise, so too does the amount that can be stolen.” However, while the overall figure increased, the rate of hacking slowed significantly in the latter half of the year. In the first seven months of 2024, $1.58 billion in crypto was stolen—an 84.4% increase compared to the same period in 2023. In contrast, the second half of the year saw a deceleration in incidents.
Decentralized Finance Platforms and Centralized Exchanges Targeted
Decentralized finance (DeFi) platforms bore the brunt of the thefts during the first and fourth quarters, while centralized services like DMM Bitcoin and WazirX suffered the most significant losses in the second and third quarters. The exploitation of these platforms highlights vulnerabilities in both decentralized and centralized crypto systems.
The most common method of attack was through private key compromises, which accounted for 43.8% of all incidents. Chainalysis warned that securing private keys is crucial for centralized services, as mismanagement or lack of security can lead to catastrophic losses. The $305 million hack of DMM Bitcoin, attributed to such security lapses, serves as a notable example of the potential risks.
North Korean Hackers Lead the Pack
State-sponsored hackers from North Korea were responsible for a significant portion of the stolen funds, pilfering $1.34 billion across 47 incidents in 2024. This marks a substantial increase from 2023, when North Korean-affiliated hackers stole $1 billion in cryptocurrency through 20 hacks. The concentrated effort in the first half of 2024 underscores the growing sophistication and scale of these cyber-attacks.
The Road Ahead: Addressing the Risks
The ongoing rise in cryptocurrency theft underscores the need for heightened security measures within the crypto ecosystem. As adoption continues to increase, so too does the responsibility of platforms and service providers to safeguard user assets against ever-evolving threats. The report from Chainalysis serves as a stark reminder of the vulnerabilities present in the crypto space and the imperative to strengthen protections in the face of increasing cybercriminal activity.
Image by A M Hasan Nasim from Pixabay
