By George Ward
Decentralized Finance (DeFi) remains a significant target for malicious actors in the cryptocurrency market, and the total amount lost to these attacks has surpassed $20 million. According to data from the DeFi tracker, DeFiLlama, the extent of the damage is evident, and most of the attacks occur due to stolen private keys.
Flash Loans Attacks Dominate Hacking Techniques
In 2023, several significant attacks occurred, including those against Platypus Finance, the dForce network, and Orion. While most attacks have been due to protocol logic issues, there has been at least one instance of a rug pull.
Meanwhile, flash loan attacks have dominated the list of recent hacks and show that flash loan attacks are still a major concern for the DeFi sector. Although the individual value of these attacks is relatively low compared to last year, their frequency and cumulative value are still as high as in 2022.
The frequency of DeFi attacks may not decrease and may even increase in the future. This is because malicious actors are shifting their attention towards other hacking techniques and targeting other industries, such as NFTs.
Notably, the incidence of NFT hacks has been on the rise, with malicious actors attempting to exploit the growing user base in this space due to its sudden surge in popularity. Reports indicate that hackers and scammers have already managed to steal millions of dollars worth of NFTs this year alone, with at least one individual single-handedly stealing several million dollars worth of NFTs.
Hackers Target NFT Marketplaces And Bridges
Due to their popularity, hackers frequently target popular NFT collections like the Bored Ape Yacht Club NFTs. Last year, NFT thefts amounted to more than $12 billion, attracting significant media attention.
Hackers typically engineer phishing attacks or target NFT marketplaces. Unfortunately, this trend may continue to affect this sector in 2023. Additionally, 2022 was challenging for the crypto market in general, not only because of the crypto winter but also due to the increasing incidents of security breaches.
According to Chainalysis, an on-chain analytical platform, the total amount stolen was over $4 billion, the highest annual figure recorded. This highlights the urgent need for crypto platforms to take action on this issue.
Furthermore, bridge attacks, which gained popularity last year, are still a cause for concern. The Lazarus Group, associated with North Korea, was responsible for approximately $1.7 billion in cryptocurrency thefts last year.
One of the significant attacks conducted by the group was the exploitation of Axie Infinity’s Ronin Bridge, resulting in the theft of $650 million.