![]() They use open-source code, so nothing stops a threat actor from analyzing them for bugs and security holes. DeFi Is an Easy Targetĭecentralized finance (DeFi) protocols, which enable transactions and peer-to-peer lending, have turned out to be an easy target for cybercriminals. The former are obviously far more vulnerable to cyberattacks-and no exchange can store all crypto offline. Hot wallets are digital, online vaults, while cold wallets are physical devices that are not connected to the internet. ![]() Hot Wallets Are VulnerableĬrypto companies use both hot and cold wallets to store customers' assets. If a threat actor were to find and exploit a vulnerability in a bridge used by the platform, they'd be able to steal millions. The daily trading volume of an exchange like Binance is measured in billions. Take popular crypto exchanges, for example. Here's another obvious reason cybercriminals target crypto-focused enterprises: by default, these companies handle extremely valuable assets. For example, if a hacker steals bitcoin, they will likely try to cover their tracks using a bitcoin mixer, which is a type of service that obscures transactions for a fee.ģ. Plus, there are ways to anonymize crypto transactions. People who deal with crypto understand that most currencies are far from anonymous, but crypto is still more difficult to trace than fiat money, which obviously makes it more attractive to cybercriminals. The market is volatile, unregulated, and rife with fraud, which makes it a haven for scammers and different types of cybercriminals. Thousands of cryptocurrencies have popped up since then, but the industry as a whole is still in its infancy. The world's oldest cryptocurrency, Bitcoin, was only introduced in 2009. Crypto Technology Is Still in Its Infancy Here are five reasons cybecriminals target crypto companies. The real question is, why? Why do these attacks keep happening? What is it that makes crypto companies such a frequent target of cybercrime? Are they uniquely vulnerable to attacks, or is there something else at play? It's a combination of various factors. And one month later, FTX lost $600 million in a massive breach.ĥ Reasons Cybercriminals Target Crypto Companies In October, Binance was attacked and lost $570 million. ![]() The market maker Wintermute, meanwhile, lost around $160 million worth of crypto in September. In a March attack that was allegedly carried out by the North Korean state-backed Lazarus Group, the Ronin Network lost around $625 million worth of digital assets. In February, hackers stole $325 million from Wormhole. The year 2022 was incredibly profitable for cybercriminals targeting crypto companies. The threat actor later returned most of the stolen assets, and said they executed the massive heist just "for fun." That same year, Bitmart lost nearly $200 million worth of crypto in an attack. In 2021, a rather unusual cyberattack shook the decentralized Poly Network, with a threat actor stealing around $600 million worth of crypto. Coincheck somehow survived this attack, and was later acquired by the Japan-based Monex Group. The same company was attacked again three years later, losing another 750,000 bitcoins.Īnother massive breach occurred in 2018, when the Coincheck exchange lost 523 million NEM (XEM) coins. According to Investopedia, the first notable crypto-related cyberattack happened back in 2011, when a threat actor stole 25,000 bitcoins from the now-defunct exchange Mt. ![]()
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