Biggest Year Ever For Crypto Hacking – With North Korea As Suspected Culprit | Scientific and technical news

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2022 was the biggest year ever for cryptocurrency hacking, with over $3.2 billion stolen worldwide, according to new research.

October alone saw £629million withdrawn – the most in a single month.

This helped the overall year to eclipse 2021’s previous record of £2.7bn, although the total number of hacks was down slightly.

The annual report from Chainalysis, a blockchain analytics company that sees its data used by governments, banks and corporations around the world, says the activity was largely driven by North Korea-based hackers.

Kim Jong Un’s regime has been repeatedly accused of hacking cryptocurrencies to make money and evade international sanctions, even using stolen digital assets to fund its missile program.

In 2022, Chainalysis claims hackers associated with Pyongyang – including the criminal syndicate Lazarus Group – stole an estimated £1.4 billion worth of cryptocurrency assets, breaking their own record.

Researchers have previously linked the group to the scheme, although it is unclear whether it is part of the government’s own operations or an external hire.

The amount of crypto allegedly stolen far exceeds North Korea’s total annual exports, which the latest figures from the Observatory of Economic Complexity put at £115 million for 2020.

“It’s no exaggeration to say that cryptocurrency hacking is a significant part of the national economy,” Chainalysis said.

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1:14 What is the main purpose of cryptocurrency?

Where was the money stolen?

The biggest victims of crypto hacks in 2022 were in decentralized finance protocols, which is basically where investors cut out the middleman – like a bank or exchange – and transfer funds directly between digital wallets .

It is becoming increasingly popular as it is seen as more transparent, which is something people value more after the collapse of leading crypto platform FTX.

But according to Chainalysis, these so-called DeFi protocols accounted for 82.1% of crypto stolen by hackers in 2022, totaling over £2.5 billion.

David Schwed of blockchain security firm Halborn said DeFi developers shouldn’t be afraid to look to traditional centralized systems for inspiration to make themselves safer to use.

“You don’t have to go as slow as a bank, but you can borrow from what banks do,” he said.

Read more:Crypto ‘too dangerous’ not to be regulatedUK investor loses £1m in FTX collapse

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0:45 ‘Regulate crypto before a systemic issue’

UK’s ‘encouraging’ regulatory plans

The report comes as the UK government unveils proposals for crypto regulation, as the market seeks to regain the confidence of investors spooked by an exceptionally volatile period.

Under the plans, which would bring the industry closer to traditional financial systems, crypto platforms would become responsible for setting the requirements a currency must meet before it is admitted to trading.

Exchanges will also be held responsible for facilitating transactions securely and protecting client assets.

Jordan Wain, head of UK public policy at Chainalysis, told Sky News the regulation was welcome.

“It is encouraging to see the common thread of consumer protection in these plans, which demonstrate a clear intention to combat potentially abusive behavior,” he said.

But he warned that stricter rules must not harm the “potential for innovation and growth” of the industry.

The proposals, which come less than a year after Rishi Sunak said he wanted the UK to become a “global center for crypto assets”, will be subject to consultation before taking effect.

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