Chainalysis Report State 2022 as A Year of Crypto Thefts

Recently, a Chainalysis report mentioned that crypto theft rose last year as frauds, ransomware bounty fell.
The report also states that 2022 was a year of crypto thefts.

Chainalysis released “The 2023 Crypto Crime Report.” The report added about why 2022 set records for crypto hacking and how sanctions on Hydra, Tornado Cash, & others impacted the crypto crime. The report also included the case studies on the year’s biggest hacks, darknet markets, & ransomware strains.

The crypto crime report

Chainalysis is a popular blockchain data platform that provides data, software, services, and research to government agencies, exchanges, financial institutions, and insurance and cybersecurity companies in more than 70 countries.

The 2023 crypto crime report mentioned that the crypto markets faced chaos in 2022. The report also highlighted the latest crypto money laundering tactics employed by cybercriminals

Last year became the biggest year for crypto thieves. As Chainalysis reported, about $3.8 billion, more than any other year, was stolen from different types of services and protocols, $775.7 million of which was stolen in October alone. At the same time, the report says the total revenue of fraudsters and ransomware hackers declined.

As mentioned in the reports, 82.1% of all the stolen funds were taken from DeFi protocols. “Especially cross-chain bridges – protocols allowing users to trade assets between two different blockchains.”

As the report reads the “Bridges are an attractive target for hackers as the smart contracts in effect become huge, centralized repositories of funds backing the assets that have been bridged to the new chain — a more desirable honeypot could scarcely be imagined.”

Chainalysis said the rising trend in DeFi hacks is oracle manipulation, when an attacker compromises the mechanisms by which a decentralized protocol gets a price for traded assets, and creates favorable conditions for fast and super-profitable trades.

As per the report, in 2022, DeFi protocols lost $386.2 million in 41 separate oracle manipulation attacks. The Mango Markets exploit is an example of this, for which the alleged attacker, Avraham Eisenberg, got arrested and now is facing commodity manipulation charges in the United States court.

Moving forward, the North Korean hackers from the Lazarus group broke their own record in 2022: $1.7 billion stolen from various victims. Most of that money was sent to decentralized exchanges and several mixers: Tornado Cash, Blender(dot)io, and, after the shutdown of Blender, to Sinbad.

Last year, the U.S. sanctioned Russian darknet marketplace Hydra, exchange Garantex, crypto mixers Blender(dot)io and Tornado Cash. Meanwhile not all the money these sanctioned services processed were of criminal origins: just 6.1% of the funds Garantex received came from illicit sources, and for Tornado Cash, the number is 34%, as per the Chainalysis report.

As Chainalysis said, sanctions really restricted the flow of funds into Tornado Cash, but Garantex remained as active as it used to be, and saw even more incoming funds from known fraud and darknet shops.