A record $3.8 billion worth of cryptocurrency was stolen from various services last year, with much of those thefts driven by North Korean-linked hackers, according to a report Wednesday from blockchain analytics firm Chainalysis.
This staggering figure represents a 150% increase in the value of stolen cryptocurrency from 2017, and points to the increasing sophistication of North Korean hackers in their efforts to pilfer digital assets.
The increase in crypto heists, from $3.3 billion in 2021, came as the overall market for cryptocurrencies suffered significant declines. The value of Bitcoin, for example, fell by more than 60% last year, making it a prime target for thieves.
North Korea was a key driver for the surge in thefts, according to the report. Hackers linked to the country stole an estimated $1.7 billion worth of crytopcurrency through various hacks in 2022, up from $429 million in the prior year, Chainalysis said. This surge in thefts can be largely attributed to the efforts of North Korean hackers, who have been increasingly targeting crytopcurrency exchanges in a bid to obtain valuable digital assets.
Cryptocurrency hacks have continued to plague the industry in 2018, with several high-profile attacks attributed to North Korea. In March, the FBI blamed hackers linked to the North Korean government for more than $600 million hack of video game Axie Infinity’s Ronin network. In June, $100 million was stolen from Harmony, a cryptocurrency firm. These attacks underscore the need for stronger security measures in the cryptocurrency industry.
Cryptocurrency hacking is a sizable chunk of North Korea’s economy, Chainalysis notes in a new report.
US officials are concerned that the money stolen from crypto hacks will be used to fund North Korea’s illicit nuclear and ballistic weapons program. North Korean hackers have stolen the equivalent of billions of dollars in recent years by raiding cryptocurrency exchanges, according to the United Nations.
Suspected North Koreans have posed as other nationalities to apply for work at cryptocurrency firms and send money back to Pyongyang, US agencies have warned in a joint statement.
In 2019, decentralized finance (DeFi) protocols were the main target of hackers, accounting for more than 80% of all cryptocurrency stolen, according to a report. These protocols are used to replace traditional financial institutions with software that allows users to transact directly with each other via the blockchain, the digital ledger that underpins cryptocurrencies.