Crypto Security in 2024: Fraud and Hacks

Here we are in 2024, and the crypto world has seen over $2 billion disappear in hacks. This isn’t just a small problem; it’s a big one. As companies in crypto face these hacks, we see the delicate balance of security and opportunity. While some may argue that these vulnerabilities are a good thing, it’s hard not to see the potential for more crypto to be lost.

The Rise of Crypto Hacks

According to Chainalysis, the American blockchain analysis firm, this year has seen the most hacks in the crypto industry, with 2022 experiencing the biggest financial hit. The data shows that 97% of stolen crypto came from DeFi platforms, primarily through smart contract exploits. But now? Centralized services seem to be the bigger target.

This brings us to a crucial point. Centralized exchanges? They are sitting ducks for hackers. They control users' private keys and hold massive amounts of funds, making them easy targets. Most of the hacks we’ve seen this year, like DMM Bitcoin and WazirX, involved private key compromises.

North Korean Cyber Operations and International Finance

In 2022, North Korean hackers nabbed $1.7 billion in crypto, mostly from DeFi protocols. In 2023, they stole about $1 billion, with an uptick in hacks. These actors have expanded their targets to include centralized crypto platforms and wallets. There’s no doubt they’re made to evade international sanctions, and that’s a big problem for international finance.

Then there’s the geopolitical implications. North Korean hacking groups use stolen cryptocurrencies to evade sanctions and fund their military programs. This is not a coincidence; it’s a strategy.

What This Means for Crypto Security

For companies operating in this space, it’s important to take a multi-faceted approach to security. Compliance with the Cryptocurrency Security Standard is essential and investing in advanced encryption techniques can go a long way. Companies must also recognize the geopolitical risks associated with cryptocurrencies.

Crypto and finance are not as separate as they once seemed. It’s all interconnected.