Stolen Funds in Crypto Theft Plummets 54.3% to $1.7B in 2023

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Stolen Funds in Crypto Theft Plummets 54.3% to $1.7B in 2023
  • Stolen funds in crypto saw a decrease of 54.3% in 2023, despite an increase in the number of crimes.
  • While 2022 witnessed a loss of $3.7 billion in crypto thefts, it decreased to a mere $1.7 billion in 2023.
  • North Korean hackers surged in the number of thefts, accumulating almost $1 billion in 2023. 

According to the latest Chainalysis report, the funds stolen over the last year in crypto crimes show a substantial decrease despite a surge in crimes. Reportedly, 2023 saw a loss of $1.7 billion in crypto thefts, a decrease of almost 54.3% from 2022’s $3.7 billion.

Source: Chainalysis

In addition, the report revealed that North Korean hackers like Kimsuky and Lazarus Group have shown a hike in crypto attacks in 2023. As per the record, though North Korean hackers were connected with thefts involving $1.7 billion in 2022 and $1 billion in 2023, the number of crimes rose to a high of 20 in 2023.

Source: Chainalysis

The considerable drop in the stolen funds could be traced to the drop in DeFi hacking, as per Chainalysis. In 2021 and 2022, the crypto industry witnessed a large number of DeFi attacks, resulting in increased stolen funds. In 2022 alone, about $3.1 billion was lost in DeFi hacks. In contrast, the funds stolen from DeFi attacks dropped to 63.7% in 2023, a loss of $1.1 billion.

Collaborating with Halborn, a blockchain security firm, Chainalysis categorized the DeFi attack vectors as on-chain and off-chain. While on-chain vectors originate from vulnerabilities in the on-chain components of a DeFi protocol, such as their smart contracts, off-chain vectors stem from vulnerabilities outside of the blockchain.

A lead security architect at Halborn, Mar Gimenez-Aguilar, asserted that both on-chain and off-chain vulnerabilities are threatful. Referring to the historical DeFi hacks, she asserted that most of the attacks resulted from vulnerabilities in smart contracts. She further added,

Another notable trend is the increase in attacks as a result of compromised private keys, which underscores the importance of improvements in security practices outside of a given blockchain.

In a recent report, Chainalysis revealed a significant drop in the total crypto value received by illicit addresses. According to the report, the value dropped 39% from $39.6 billion in 2022 to $24.2 billion in 2023.

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