December 2022 crypto attacks were a relatively small loss of $62 million

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Although 2022 is the worst year for crypto attacks, the wave in December bottomed out, making it the least dangerous month of last year.

According to a Coindesk report, December saw the lowest number of crypto attacks in 2022. However, the report, citing blockchain audit firm CertiK, noted that scams and hacks accounted for a massive loss of 3 .7 billion over the last year. This fact makes 2022 the worst year for criminal activity in the history of the crypto and blockchain sectors.

Although 2022 was an uneventful year in terms of crypto attacks, December provided some commendable examples for market participants. There were $62 million in stolen tokens, scams, or hacks last month, making it the least dangerous month. In contrast, crypto attacks worth an overwhelming $595 million occurred in November 2022.

Deeper Analysis of December 2022 Crypto Attacks

The two most notable crypto attacks in December 2022 were the $12 million Defrost Finance hack and the $15 million Helio Protocol exploit. The Defrost Finance attack is said to have been born out of a “carpet pull” that saw developers disappear with investors’ money. However, the team behind the initiative pushed back against these claims and called them defamatory and inaccurate.

Other relatively minor attacks late last year included a flash loan exploit that resulted in a loss of $7.6 million. Flash loans are a popular means by which attackers gain funds to perform exploits on decentralized finance (DeFi) systems. Loans allow merchants to borrow unsecured funds from lenders through smart contracts instead of third parties. Also, no collateral is required as the contract only considers the transaction complete after the lender has been repaid. Therefore, the implication of this process suggests that the default of a flash loan would trigger the smart contract to reverse the transaction. Cancellation of said transaction would also see the money returned to the lender.

Of the previously mentioned $7.6 million flash loan figure, a single Lodestar attack was a whopping $6.5 million.

Several other crypto projects have also suffered similar attacks, with losses ranging from $50,000 to $300,000.

Although attackers took home $3.2 billion in 2021, the following year got off to an even more inauspicious start. For example, there was the $325 million hack of popular cross-chain platform Wormhole. This exploit was followed by the much more substantial $625 million Cyber ​​Assault on Axie Infinity’s Ronin Bridge. 2022 also saw a major $200 million attack on the Nomad Bridge.

Ways to hack

There are several ways miscreants perform exploits and attacks within the crypto and blockchain industry. These include exploiting bridges, flash loans and market manipulation.

The Blockchain Bridge Exploit sees hackers attacking the blockchain-based tool that facilitates user transactions between different networks. Meanwhile, a typical market manipulation hack sees rogue traders deploying large sums of money to influence thinly traded markets in their favor. The usual end goal of such market manipulation is to pocket multiples well above the initial capital deployed.

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Tolu is a Lagos-based cryptocurrency and blockchain enthusiast. He likes to demystify crypto stories to the essentials so that anyone, anywhere can understand without too much background knowledge. When not immersed in crypto stories, Tolu loves music, likes to sing, and is a movie buff.

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