In 2022, there was an increase in hacking activities in the decentralized finance (DeFi) sector.
DeFi hacks in 2022 reach 6,000 million dollars
Hackers stole more than $6 billion, as cryptanalyst Kofi reported, using data from DefiLlama, on February 4, 2023.
The most devastating DeFi hack in 2022 was the Ronin hack, among many other high-profile security breaches.
Attackers used many methods to exploit vulnerabilities in DeFi. Hackers found holes in broken bridges, compromised private keys, and exploited flash loans.
As the DeFi ecosystem grows, the community must remain vigilant and aware of the potential for attacks and security breaches.
In December 2022, Ari Redbord, Head of Legal and Government Affairs at TRM Labs and a former US Department of Justice (DoJ) prosecutor, warned that hackers are improving their ways. He advised DeFi platforms to stay ahead by continually updating and improving their security measures.
Redbord believes that in order to track and identify illegal activities on DeFi platforms, advanced “blockchain intelligence tools” are needed to detect and monitor cryptocurrency mixers before they can be used for money laundering. These tools will bolster the security and reliability of trustless protocols, allowing cybersecurity and law enforcement specialists to track and prevent illegal activity.
Illicit crypto transactions reach $20 billion
Chainalysis, a New York-based analytics firm, previously reported that the value of illegal cryptocurrency transactions hit a record $20.1 billion in 2022, an increase of 40% compared to the previous year. According to the report, North Korea significantly confiscated a large portion of these funds.
Criminals and hackers use various methods, both centralized and decentralized, to launder and transfer illegal funds. However, as those who intend to engage in illicit activities in DeFi and crypto are becoming increasingly sophisticated, regulations, tools, and people are also evolving as a countermeasure.
Recently, an international operation led by French and US law enforcement, in collaboration with Europol, successfully took down the Bitzlato cryptocurrency exchange. Investigations revealed that 46% of all transactions made through Bitzlato, amounting to approximately €1 billion, were linked to illegal activities such as money laundering, scams, cyber-attacks, and child abuse material.
