A blog post from blockchain analysis firm, Chainalysis, released on Tuesday has indicated that losses incurred from cryptocurrency hacks have increased by nearly 60% in the first seven months of the year to $1.9 billion, following a surge in funds stolen from decentralized finance (DeFi) protocols.
Reuters report that in the same period last year, stolen funds from hacking amounted to $1.2 billion.
DeFi applications, many of which run on the Ethereum blockchain, are financial platforms that enable crypto-denominated lending outside of traditional banks.
The report noted that the trend is not likely to reverse any time soon, given the $190 million hacking of cross-chain bridge Nomad and $5 million hacking of several Solana wallets already in the first week of August.
“DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and grow quickly lead to lapses in security best practices,” Chainalysis said in the blog.
Much of the funds stolen from DeFi protocols can be attributed to “bad actors” affiliated with North Korea, especially elite hacking units like Lazarus Group, the U.S. firm wrote.
Chainalysis estimates that so far this year, North Korea-affiliated groups have stolen approximately $1 billion of cryptocurrency from DeFi protocols.
With respect to crypto scams, the blockchain intelligence firm saw a sharp 65% decline through July, in line with the slump in digital asset prices. Total scam revenue in the year to July was $1.6 billion, down 65% from around $4.46 billion in the same period last year.
*Culled from Reuters
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