attack news december

Crypto hacks shrink in 2020, attacks on DeFi projects increase

Crimes related to cryptocurrency are low this 2020 according to a report from CipherTrace, a major crypto analytics firm. But the up and coming decentralized finance projects are experiencing a surge in criminal activities.

In 2019, the global crypto sector lost over US$4.5 billion to numerous cyber attacks. The number has significantly dropped this year to an all-time low of $1.8 billion for the past 10 months of the year. According to the crypto intelligence company CipherTrace, crypto exchange sites have drastically improved their security over the year and successfully safeguarded their assets against fraudulent attacks.

‘What we have seen is that exchanges and other cryptocurrency players have implemented more security procedures,’ says Dave Jevans, the chief executive officer of CipherTrace in an interview with global business news site Reuters. He added, exchange sites took the guidance of security experts and properly implemented the right procedures to better secure their assets better. With this development, the global crypto community can expect less mass-scale attacks.

Starting from the beginning of the year up to the end of October, the total loss from cyber thefts and hacks grew to US$467 million in total. This was a 30% increase compared to the US$361 million total loss due to fraudulent attacks in the previous year.

However, CipherTrace clarified in their report that 20% of those attacks came from the decentralized finance or DeFi sector. Roughly US$98 million were lost on transactions on platforms facilitated by lending outside of banks.

DeFi lending platforms loan businesses and individuals with the funds they need without needing an intermediary. As of early November, the total number of loans disbursed by DeFi platforms have reached US$12.6 billion which was 200% more than the amount last August, according to the data from industry site DeFi Pulse.

This huge surge of assets is what possibly attracted criminal hackers, turning their attention away from exchange sites and targeting more vulnerable platforms.

Jevans adds that companies and individuals rushed DeFi products to market them as soon as possible. As a result, they have not gone through the tight security verification and validation processes to ensure it’s protected against fraudulent attacks.

Compared to blockchains, DeFi networks are less secure because of their permissionless design. Hackers possibly found this weakness and exploited it, resulting in the billions of dollars stolen.

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