Rising Prices, Rising Risks: Crypto Hacks Skyrocket To $1.6 Billion, Report

Crypto investors and platforms are facing a growing threat as the value of crypto hacks has nearly doubled in the first seven months of 2024, reaching a staggering $1.6 billion, according to a new report from blockchain analytics firm Chainalysis.

Crypto Theft Skyrockets In 2024

While the monetary value of stolen funds has skyrocketed, the actual number of hacks witnessed a marginal increase, rising from 145 incidents in the corresponding period of 2023 to 149 hacks so far this year. 

Eric Jardine, the cybercrimes research lead at Chainalysis, attributed a substantial portion of this spike in stolen value to the remarkable price appreciation experienced by various crypto assets throughout 2024.

The debut of spot Bitcoin exchange-traded funds (ETFs) in the US at the beginning of the year triggered a surge in Bitcoin’s value, propelling it to a record high of nearly $74,000 by March. 

Despite recent market fluctuations that have tempered some of these gains, Bitcoin still boasts a solid 38% increase in value this year. Notably, Bitcoin accounted for 40% of the total proceeds from crypto heists in 2024, as estimated by Chainalysis.

The Asia-Pacific region, in particular, has been a hotspot for high-profile exploits in recent months. Instances such as the $301 million loss incurred by Japanese operator DMM Bitcoin due to an “unauthorized leak” and the $235 million drained from India’s WazirX have highlighted vulnerabilities in centralized exchanges.

CEXs Emerge As Prime Targets

The report also shed light on North Korean-linked groups, renowned for their alleged involvement in significant digital asset heists, utilizing increasingly sophisticated social engineering strategies to breach digital asset platforms. US law enforcement authorities have previously linked North Korea to large-scale cryptocurrency thefts.

The surge in crypto theft follows a record $3.7 billion stolen in 2022, which was then followed by a decline to $1.7 billion in 2023 as decentralized finance (DeFi) platforms improved their security measures and token prices stabilized.

However, the latest data suggests that hackers are once again setting their sights on centralized exchanges (CEXs), which often hold large amounts of cryptocurrency and may have weaker security protocols than their DeFi counterparts.

At the time of writing, the total crypto market capitalization stands at $2 trillion after dropping to the $1.6 trillion mark in early August. Bitcoin, the largest cryptocurrency, is currently managing to regain the $59,000 level on Friday after falling to a weekly low of $56,100 on Thursday.

Ethereum (ETH), the market’s leading altcoin, is also up 1.3% over the past 24 hours and is currently trading just above its key support level of $2,600 after hitting a low of $2,500 on Thursday.

Featured image from DALL-E, chart from TradingView.com