Hackers are preying on NFT projects

Hackers are preying on NFT projects

Crystal Blockchain has released a report showing how the crypto industry has been a hacker’s favorite since 2011. Additionally, the attention is spreading to NFTs after NFT collector Kevin Rose lost NFTs worth close to $1 million.

DeFi protocols are becoming hacker’s favorite projects

DeFi protocols have suffered numerous hits from hackers since 2011. By March 24, 2023, hackers have made away with crypto worth $16.7 billion in 231 DeFi hacks, 135 security attacks, and 95 fraudulent schemes. The Crystal Blockchain report considered data ranging from the 2011 Mt. Gox crypto exchange hack to Feb. 18, 2023.

Fraudulent activities in the DeFi system have heightened in 2022 & 2023. The stolen $16.7 billion has been through three main ways, with $4.5+ billion stolen through security breaches,$7.5+ billion through scams, and $4,81+ billion through DeFi hacks.

Feb 2, 2023, Bonq DAO hack is the biggest hack in the history of DeFi. Hackers altered the  decentralized borrowing protocol’s smart contract, compromised the allianceBlock tokens price, and drained crypto worth $88 million from the protocol’s hot wallet.

The second-largest DeFi hack was the Platypus Finance protocol hack. The hackers used a flash loan to compromise the USP stablecoin and siphon close to $9 million in funds from users. The protocol partly repaid the investors as investigators tracked down the hackers and arrested them in France. 

The most significant phishing attack in 2023 was when Kevin Rose, an NFT collector, lost NFTs worth close to a million dollars when his wallet was hacked in January.

DeFi hacks have increased overtime

Crystal Blockchain reported 199 incidents in 2022 that led to the theft of $4.17 billion, but Chainalysis reported differently, saying that only  $3.8 billion was stolen in 2022. However, Chainalysis released the report in Feb 2023, saying the number could grow as more information about fraudulent activities emerged.

DeFi protocols have been compromised 13 times more than centralized protocols in 2022. The most significant hack was the March 2022 Ronin cross-chain bridge, where the protocol lost tokens worth $625 million.

US-based firms have attracted hackers the most, but the most valuable scams are from China. China lost $2.25 billion through the 2019 PlusToken Ponzi scheme and  $1.1 billion through the 2020  WoToken scam.

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