By Josh Smith
SEOUL (Reuters) – Last year was the worst on record for cryptocurrency thefts, with hackers stealing up to $3.8 billion, led by North Korea-linked attackers raking in more than ever. on Wednesday.
Chainalysis’ report found hacking activity “comes and goes” throughout the year, with “huge spikes” in March and October. October was the biggest month ever for cryptocurrency hacking, with $775.7 million stolen in 32 separate attacks, the report said.
The cryptocurrency market crashed in 2022 as risk appetite declined and various cryptocurrency companies collapsed. Investors have suffered large losses and regulators have stepped up calls for greater consumer protection.
At the time, Chainalysis and other companies confirmed to Reuters that North Korea-linked accounts had lost millions of dollars in value.
But that hasn’t deterred hackers.
North Korea-linked hackers, such as those at cybercriminal syndicate Lazarus Group, were by far the most prolific cryptocurrency hackers, stealing an estimated $1.7 billion worth in multiple attacks last year, says the report.
“In 2022, they broke their own records for theft,” he said.
North Korea has denied the allegations of hacking or other cyber attacks.
North Korea has increasingly relied on hacking to finance its nuclear weapons and missile programs, particularly as publicly reported trade has declined due to sanctions and of the COVID-19 lockdowns.
“It is no exaggeration to say that cryptocurrency hacking is a sizable part of the nation’s economy,” Chainalysis said.
For the first time last year, US law enforcement seized $30 million in stolen funds from North Korean-linked hackers.
“These hacks will get harder and less successful with each passing year,” Chainalysis predicted.
Targets of “decentralized finance” or DeFi, a burgeoning segment in the cryptocurrency industry, accounted for more than 82% of stolen cryptocurrencies in 2022, the report said.
DeFi applications, many of which run on the Ethereum blockchain, are financial platforms that allow for cryptocurrency-denominated lending outside traditional banks.
Last year saw a record amount of crypto transactions related to illicit activity in general, reaching $20.1 billion, Chainalysis said in January.
(Reporting by Josh Smith, editing by Louise Heavens)