According to Atlas VPN analysts, hacker attacks related to blockchain and cryptocurrencies have brought cybercriminals the equivalent of $ 3.8 billion for all of 2020.
These numbers are based on data from the Slowmist Hacked team and include information on uncovered attacks targeting blockchain projects, applications and tokens, as well as cryptocurrency fraud in general. The share of the latter in the total losses of victims of fraudsters is 13 percent in 2020. Let’s talk about the results of the year in more detail.
First, a little explanation: fraud and theft involving cryptocurrencies are really popular, and the reasons for this are in the peculiarities of the latter. Cryptocurrency networks are decentralized, that is, they have no central authority, and all coin users are equal. Taking this into account, no one can return the cryptocurrency from the hacker’s address if the funds are stolen, or block it – which the bank is quite capable of doing.
The only exception here can be centralized platforms like cryptocurrency exchanges. The guides of the latter actively block fraudsters’ wallets if the theft of funds has been confirmed. Thus, a certain part of the money can be returned.
Statistics on the theft of bitcoins and other cryptocurrencies
Decentralized applications powered by Ethereum have been hit by 47 attacks totaling $ 436.36 million. Major cryptocurrency exchanges have been hacked at least 28 times for $ 300.15 million, Decrypt reports. Crypto wallets have become the “most valuable prey” of hackers, the total amount of their income from this attack area exceeds $ 3.03 billion.
In addition, each hack of a cryptocurrency address usually brought in more money to the attackers compared to attacks on cryptocurrency exchanges or decentralized applications. Ratio: Average $ 112 million for a hacked crypto wallet versus $ 9.28 million for dApps and $ 10.72 million for a crypto exchange.
Hacking certain cryptocurrency wallets of wealthy owners can really make a lot of money – especially if the attack is planned. As an example, here is the situation with the CEO of the Nexus Mutual platform Hugh Karp, who lost the equivalent of $ 8 million in a similar incident.
The hacker gained remote access to Karp’s computer, replaced the cryptocurrency wallet with a fake one, and essentially forced him to personally send funds to his address – although Hugh did not know about it. Read more about this incredible deception scheme in a separate article.
Last year, there were 12 successful attacks on the blockchains themselves, bringing hackers $ 5.91 million. The most striking example is a series of 51 percent attacks on the Ethereum Classic network, which we covered in detail in our materials. At the same time, only a few attacks were recorded on decentralized applications based on the Tron and EOS blockchains. In each ecosystem, only three decentralized applications have been hacked. However, these attacks resulted in at least $ 10 million in losses.
It is worth noting that the aforementioned losses in dollar terms are now much larger than they were at the time of the attacks themselves. It’s all about the rapid rise in the price of Bitcoin in the second half of 2020, while the amounts of losses were calculated based on the market rate of the cryptocurrency as of January 12, 2021, that is, at a price of $ 34,000 per coin. But just a couple of weeks ago, the value of BTC was lower than the previous all-time high of $ 20,000.
The report also notes an overall decline in attacks, for the first time in five years. While in 2019 there were 133 coordinated attacks targeting various platforms, applications and blockchain tokens, in 2020 that number dropped by 8 percent, to 122.
As you can see, the increased activity of hackers and fraudsters is still one of the main problems of the industry. It also often discourages new investors from making large investments in Bitcoin and altcoins. Therefore, if we want to achieve rapid growth in the adoption of cryptocurrencies around the world, project and platform teams should first of all take care of the security of their creations.
We believe that it is also important for cryptocurrency exchanges and other popular platforms to educate their users here. After all, if the latter learn not to follow random links from strangers and download suspicious files, then the security of their funds will increase significantly. Well, if you add a hardware wallet here for storing large amounts, then it will be even better.