Crypto Theft: North Korea-Linked Hackers Steal $1.7 Billion
North Korea-backed hackers stole an estimated $1.7 billion in cryptocurrency in 2022, according to blockchain analysis firm Chainalysis. This marks a significant increase from the $429 million stolen in 2021 and is a clear indication that the country is turning to crypto theft to fund its nuclear arsenal, facing heavy sanctions. The stolen funds made up 44% of the $3.8 billion stolen in crypto hacks last year, which Chainalysis called “the biggest year ever for crypto hacking.”
Crypto Theft: Laundering of Stolen Funds
The hackers typically launder the stolen crypto through “mixers” or brokers in China, and use non-fungible tokens (NFTs) to hide the origin of the funds. The FBI confirmed last month that the Lazarus Group, a North Korea-affiliated, was responsible for a $100 million crypto heist on the Horizon Bridge blockchain network.
Crypto Theft: DeFi Platforms a Soft Target
Chainalysis’ report also showed that decentralised finance protocols, or DeFi, accounted for over 82% of cryptocurrency stolen in 2022. The transparency of DeFi makes it attractive to hackers who can scan the codes for vulnerabilities, but it also means that DeFi developers must prioritize security to prevent theft.
Enhancing Security in DeFi:
David Schwed, chief operating officer at blockchain security firm Halborn, advised DeFi developers to take cues from traditional financial institutions in making their platforms more secure. He suggested simulating different hacking scenarios to test their protocols or designing mechanisms to pause or halt transactions when suspicious activity is detected. “You don’t need to move as slow as a bank, but you can borrow from what banks do,” Schwed said.
The increase in crypto theft by North Korea-linked hackers highlights the need for enhanced security measures in the DeFi sector. DeFi developers must prioritize security over growth and take steps to ensure their platforms are secure against hacking attempts. By taking cues from traditional financial institutions and implementing proper security measures, DeFi can continue to grow and flourish while ensuring the safety of users’ funds.