Hackers and crypto scammers are increasingly motivated to commit crimes as the price of cryptocurrencies rises, according to a new report from blockchain analytics firm Chainalysis.
The report reveals that the total amount of stolen cryptocurrency has surged by approximately 21.07% year-over-year (YoY), reaching an alarming $2.2 billion in 2024. This rise coincides with a jump in the number of hacking incidents, from 282 incidents in 2023 to 303 in 2024. As the cryptocurrency market continues to grow and gain attention, the incentives for cybercriminals to target digital assets have also increased.
Shifting Targets: Centralized Services in Focus
The Chainalysis report highlights a significant shift in hacker tactics in 2024. While decentralized finance (DeFi) platforms have traditionally been prime targets for crypto theft, this year has seen an uptick in attacks on centralized services, including cryptocurrency exchanges. These platforms offer high liquidity and large volumes of funds, making them increasingly attractive targets for hackers.
Among the most significant breaches in 2024 were the May hack of DMM Bitcoin, which saw $305 million stolen, and the July breach of WazirX, which led to a loss of $234.9 million. The WazirX hack, in particular, severely impacted the Indian crypto investor community. In response to the attack, the exchange halted user withdrawals and is currently undergoing restructuring efforts in Singapore.
The rise in attacks on centralized exchanges underscores a growing vulnerability in the crypto ecosystem. Centralized platforms, which are less decentralized than DeFi protocols, tend to hold more customer funds, making them prime targets for large-scale thefts.
North Korean Hackers Ramp Up Activity
One of the most alarming findings of the report is the continued involvement of North Korean hackers in stealing cryptocurrencies. Chainalysis tracked a substantial increase in the amount of funds stolen by North Korean-affiliated hacking groups, which are known to be seeking illicit ways to circumvent international sanctions.
In 2023, these groups stole approximately $660.5 million across 20 incidents. However, in 2024, the figures skyrocketed to $1.34 billion across 47 incidents—representing a staggering 102.88% increase in the value of stolen assets. These North Korean hackers now account for 61% of the total value of stolen crypto this year. The report also pointed out that these groups were involved in 20% of all reported hacking incidents in 2024, further cementing their dominance in the crypto crime space.
Chainalysis noted that despite this increase, the collaboration between Russian President Vladimir Putin and North Korean leader Kim Jong Un could have temporarily influenced the scale of thefts. While North Korea’s cybercriminal activities have intensified, there are speculations that their international dealings could impact their future crypto heists.
The Role of Decentralized Finance (DeFi) Protocols
While DeFi platforms were initially the focal point of crypto thefts, the report clarifies that 2024 witnessed a resurgence of attacks targeting these platforms. In Q1 2024, DeFi was still responsible for the largest share of stolen assets, with decentralized exchanges, lending platforms, and liquidity pools becoming prime targets. Despite a decline in attacks against DeFi platforms in subsequent quarters, the sector still accounts for a significant portion of total crypto theft.
For example, notable DeFi hacks earlier in the year saw millions of dollars stolen through vulnerabilities in smart contracts and flash loan attacks. As DeFi grows in popularity, experts have cautioned that vulnerabilities in these emerging technologies will continue to pose a risk to investors and users.
Growing Threats and the Need for Enhanced Security
As the volume of stolen funds increases, Chainalysis stressed the urgent need for both centralized and decentralized service providers to invest heavily in security. The rise in hacking incidents and thefts highlights a critical issue: the cryptocurrency industry must take steps to improve the security of both user funds and infrastructure.
Many exchanges and wallet services are already implementing more robust security measures, such as multi-signature wallets, two-factor authentication (2FA), and enhanced encryption protocols. However, these measures need to be continually updated to stay ahead of increasingly sophisticated hacking techniques. Furthermore, the growing adoption of crypto by institutional investors and larger entities will only increase the stakes for ensuring secure platforms.
The Global Impact of Crypto Crime
The rise in stolen crypto funds has broader implications for the global cryptocurrency market. While many individuals are directly affected by thefts, the overall market integrity is also compromised when large sums are stolen from prominent exchanges and DeFi platforms. These high-profile incidents contribute to a loss of confidence in the crypto ecosystem, leading to regulatory scrutiny in various jurisdictions.
Regulators around the world are paying closer attention to the crypto space, with many countries, including the United States, European Union, and India, increasing their efforts to establish frameworks for securing digital assets and combating cybercrime.
The report calls for a more collaborative approach between governments, blockchain companies, and cybersecurity experts to develop standards and frameworks that can better protect crypto users and platforms.
Conclusion: Rising Challenges for the Crypto Ecosystem
The increase in stolen crypto funds and hacking incidents in 2024 serves as a stark reminder of the evolving risks within the digital asset space. With cybercriminals targeting both centralized exchanges and DeFi protocols, the need for comprehensive security measures has never been more urgent. As crypto adoption continues to grow globally, ensuring the protection of user funds and data will be paramount for the long-term health of the industry.
Chainalysis urges industry stakeholders to continue improving security practices and to collaborate with regulators to prevent further damage. If the industry can rise to meet these challenges, it will be better positioned to continue its growth, despite the evolving risks posed by cybercrime.
