Diya Poddar
Hackers have more than doubled their cryptocurrency spoils in the first half of 2024 compared with the same period last year, according to a report from blockchain research firm TRM Labs.
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The report highlights a significant increase in stolen crypto, totaling $1.38 billion between January 1 and June 24, up from $657 million in the same timeframe in 2023.
Key cryptocurrency theft methods in 2024
The sharp increase in cryptocurrency theft is attributed to a few large-scale attacks, with the top five hacks accounting for 70% of the total amount stolen in the first half of 2024.
The largest heist this year involved more than $300 million worth of bitcoin stolen from the Japanese crypto exchange, DMM Bitcoin.
TRM Labs identified private key and seed phrase compromises as the primary attack vectors in 2024.
Seed phrases are sequences of random words used to store the information needed to access or recover a crypto wallet.
Another technique used by hackers is address poisoning, where attackers send a small amount of crypto from a wallet with a similar-looking address to trick the victim into sending funds to the wrong wallet.
No fundamental changes in crypto security
Despite the increase in stolen crypto, TRM Labs noted that there have been no fundamental changes in the crypto ecosystem’s security that could have contributed to the rise.
The number of attacks and attack vectors remained relatively constant year over year. Higher average crypto prices in the first half of 2024 could have played a role in the higher value of stolen assets.
High-profile incidents and historical context
Crypto companies have been frequent targets for hacks and cyberattacks. One of the most notable incidents in the industry’s history occurred in 2014 when the crypto exchange Mt. Gox filed for bankruptcy after a series of hacks resulted in the theft of up to 950,000 bitcoin, worth more than $54 billion at today’s prices.
In November 2023, approximately $115 million was stolen from HTX exchange and Heco Chain, two crypto platforms linked to high-profile entrepreneur Justin Sun.
Strategies to combat crypto theft
To combat the persistent threat of hacks and exploits, TRM Labs recommends that crypto firms adopt a multi-layered defense strategy.
This includes measures such as regular security audits and robust encryption. Educating employees and implementing a comprehensive incident response strategy can also help protect companies from potential breaches.
The report emphasizes the importance of vigilance and proactive security measures in the face of evolving cyber threats.
As the value of cryptocurrencies continues to rise, so too does the incentive for hackers to target these digital assets. Firms operating in the crypto space must stay ahead of these threats by continuously improving their security protocols and educating their workforce on best practices.
Implications for the crypto industry
The surge in cryptocurrency theft has significant implications for the industry, affecting not only the companies directly targeted but also the broader market.
Increased incidents of theft can erode trust among investors and users, potentially slowing the adoption of cryptocurrencies.
Moreover, the financial losses incurred by these hacks can have a ripple effect on the market, leading to increased volatility and uncertainty.
As the crypto industry continues to evolve, maintaining robust security measures will be crucial in safeguarding assets and ensuring the stability and growth of the market.
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