According to a research report, $1.3 billion in digital currencies have been stolen during the first quarter of 2022. The study, published by cryptomonday.de researchers, further highlights that 97% of the stolen funds derived from decentralized finance (defi) protocol exploits.
Defi Exploits Account For The Lion’s Share Of Stolen Crypto This Year
2022 is already breaking records in terms of stolen cryptocurrencies from hacks and exploits. Last year $3.2 billion worth of digital currencies were stolen and so far 2022 has seen over 40% of the 2021 aggregate in the first quarter alone. The stolen cryptographic data recorded comes from a report published by cryptomonday.de and study author Elizabeth Kerr. The report’s author says “the numbers signify a major spike”.
For instance, out of the $1.3 billion in digital currencies stolen this year, 97% of the funds were taken from defi protocols. In Q1 2021, only 72% of the stolen funds derived from defi and in 2020, the number was as low as 30%. Moreover, most of the theft in 2022 came from faulty code exploits where smart contract errors have been used to siphon stolen money from defi protocols. The author says that because the defi environment is open source, anyone can search for vulnerabilities and errors within a defi project’s codebase.
Centralized Exchange Hacks Drop Significantly
The research further clarifies that in previous years, centralized exchanges were popular honeypots, but attacks on centralized trading platforms have decreased. “[Centralized exchange attacks] no longer represent less than 15% of [stolen] cryptos,” Kerr writes. The report also notes that common hacks of the defi protocol came in the form of flash loan attacks and security breaches. The author of the report further mentions the attack on the Ronin Bridge, which resulted in a loss of over $600 million.
“Hackers and cyber criminals made away with more than $3.2 billion last year and we just might have a higher amount being stolen this year, if the first quarter is anything to go by. The need for tighter security measures grows by the day, especially since more people are coming aboard,” Jonathan Merry, CEO at Cryptomonday explained in a statement.