Besides a prolonged bear market, the crypto space is battling another plague of heists targeting different products in the sector. The number of crypto industry thefts has spiked, contributing to the significant loss of investor funds.
In particular, according to data presented by Finbold, in 2022 the number of cryptocurrency related heists hit 190 as of 9 December, representing a growth of 43.93% from last year’s figure of 132. In 2020, 50 incidents were recorded, while in 2019, the crypto sector accounted for 41 heists.
Notably, the number of heists hit double digits for the first time in 2018 at 38, a record growth of over 320% from the 2017 figure of nine. The lowest number of incidents was recorded in 2011 at four.
At the same time, the value lost in heists has varied over the years, with the top 10 incidents leading to an accumulative fiat value loss of $4.28 billion. The March 2022 Ronin Network (Axie Infinity) heist ranks top with $620 million stolen, followed by Poly Network at $610 million. The Binance hack of October 2022 resulted in a loss of $570 million, followed by Coincheck at $532 million.
The recent FTX crypto exchange collapse ranks in the fifth spot at $477 million, while the infamous MT Gox incident occupies the sixth spot overall at $470 million.
Other high-profile heists include Wormhole ($326 million), KuCoin ($281 million), PancakeBunny ($200 million), and Bitmart ($196 million).
Drivers of crypto heists
The report also identified some factors driving the increasing number of heists in the crypto space. It says:
“Indeed, hackers are taking advantage of the cryptocurrency sector’s infancy stages to initiate the heists by leveraging sophisticated techniques, such as using multiple wallets and exchanges, to obscure their tracks and make it more difficult to identify them. In this line, the anonymity and lack of regulation in the cryptocurrency market partly make it easier for hackers to operate without being detected or traced.”
Overall, bad actors are likely to continue innovating means of exploiting vulnerabilities in the crypto space. However, the number of incidents will likely drop with an increased focus on the right regulatory approaches and keen consideration for security measures.
