A recent Chainalysis analysis stated that ransomware and fraud increased cryptocurrency theft last year.
"The 2023 Crypto Crime Report" was published by Chainalysis. The paper also discussed the reasons why 2022 established records for cryptocurrency hacking and the effects of sanctions against Hydra, Tornado Cash, and other companies on cryptocurrency crime. In addition, case studies on the greatest hacks, darknet markets, and ransomware variants of the year were included in the paper.
Rise in crypto crime
Chainalysis is a well-known blockchain data platform that serves more than 70 nations' worth of exchanges, financial institutions, insurance organisations, and cybersecurity firms with data, software, services, and research.
The 2022 instability on the cryptocurrency markets was addressed in the 2023 crypto crime report. The paper also highlighted the most recent methods used by fraudsters for laundering money using cryptocurrencies.
For cryptocurrency criminals, 2017 was a good year. Over $3.8 billion, more than any other year, was stolen from various services and processes, with $775.7 million of that total occurring in just one month, according to Chainalysis. The research also claims that fraudsters' and ransomware hackers' overall revenue decreased.
As stated in the papers, DeFi methods accounted for 82.1% of the stolen money. "In particular, cross-chain bridges, which are protocols that let users exchange assets between two separate blockchains."
"Bridges are an enticing target for hackers as the smart contracts in effect become massive, centralised warehouses of monies backing the assets that have been crossed to the new chain – a more desirable honeypot could barely be imagined," the paper states.
Oracle manipulation, according to Chainalysis, is a growing trend in DeFi hacks. This is when an attacker subverts the mechanisms used by a decentralised protocol to determine the price of traded assets and establishes favourable conditions for quick and extremely profitable trades.
DeFi protocols lost $386.2 million in 2022 as a result of 41 different oracle manipulation attacks. A case in point is the Mango Markets exploit, which led to the arrest of the suspected attacker, Avraham Eisenberg, who is now accused of manipulating commodities in a US court.
The Lazarus squad of North Korean hackers surpassed their previous record in 2022, stealing $1.7 billion from numerous victims. The majority of that money was sent to decentralised exchanges and a number of mixers, including Tornado Cash, Blender(dot)io, and Sinbad after Blender was shut down.
The Russian darknet marketplace Hydra, the exchange Garantex, the cryptocurrency mixers Blender(dot)io, and Tornado Cash were all sanctioned by the United States last year. However, not all of the money processed by these sanctioned services had criminal origins; according to the Chainalysis analysis, just 6.1% of the money Garantex received and 34% of the money received by Tornado Cash came from illegal sources.
Sanctions, as stated by Chainalysis, significantly reduced the amount of money that could enter Tornado Cash, however, Garantex continued to operate as usual and reported an increase in receiving funds from recognised darknet and fraud sites.
