$5 Billion Stolen in DeFi Hacks

In 2022, around $5 billion was stolen from DeFi ledgers.

There were about $5 billion stolen from DeFi ledgers in 2022. 2022 was particularly lucrative for crypto hackers.

The Terra collapse in May, the FTX bankruptcy in November — 2022 proved to be more downhill than uphill for investors. The result so far: billions burned, countless companies in bankruptcy, lasting reputational damage. Hackers, on the other hand, are rubbing their hands. Cybercrime in the crypto sector kept rising this year. The DeFi sector remains especially vulnerable. The most recent example: Ankr.

History repeats itself

It's the same old story: bugs in the smart contract, leading to millions in crypto assets being lost. Currently, the DeFi protocol Ankr hit, where apparently a "coinbug" invited hackers to mint coins in arbitrary quantities. More than $5 million is believed to have been taken from the protocol by 21 hackers, according to security firm PeckShield.

Unfortunately not rare in the DeFi market, where in 2022 "$2.7 billion in cryptocurrencies were lost to hacks of smart contracts or protocol infrastructure" View post on X. A 63 percent increase from the previous year.

North Korea behind the biggest DeFi hack

With losses of more than $625 million, the March attack on Axie Infinity's Ronin Bridge went down in the books as the largest DeFi hack to date. Attackers seized control of validators, allowing withdrawals of large amounts of crypto assets. A move by North Korea's Lazarus hacking group.

DeFi hacks cross the $5 billion threshold

According to DeFiLlama, the total value of hacked DeFi logs is about $5 billion. Bridges, which enable token swaps across blockchains, are the biggest Achilles' heel. Bridges account for about half — $2.5 billion — of the stolen crypto assets in the DeFi sector.

A dilemma, as security firm Quantstamp writes: "While bridges carry a lot of risks and vulnerabilities, the need to move assets from one blockchain to another isn’t going away." Indeed: bridges are playing an increasingly important role in the crypto sector. That also heightens the danger of exploits. "The more value flows through cross-chain bridges, the more attractive they become to hackers," Chainalysis notes. Given the growing interconnectedness in the DeFi space (with interoperability as the keyword), hackers will likely be rubbing their hands again next year.