Crypto Hacks and Ransomware on the Rise, Illegal Cryptocurrency Activity Declines
Date: 2024-08-16 Author: Henry Casey Categories: BUSINESS
A recent report from Chainalysis found that the overall volume of illicit cryptocurrency transactions will decline in 2024, although specific types of criminal activity in the sector have increased. A report released on August 15 as part of the mid-year crypto crime update found that hacking and ransomware attacks are becoming more common.
The adoption of spot Bitcoin and Ethereum exchange-traded funds (ETFs) in the United States has helped fuel legitimate activity on the blockchain. However, this increase in legitimate activity has been accompanied by a rise in crypto-related crime.
In particular, two categories have been seen to increase – theft of funds through hacking and ransomware attacks. Of particular concern is the resurgence of hacking in 2024. Chainalysis has seen a significant increase in the value of stolen assets.
By the end of July, the total value of stolen cryptocurrency had reached $1.58 billion, up 84% from the same period in 2023. While the number of hacking incidents has only increased slightly (2.8% year-over-year), the average value stolen in a single hack has increased dramatically.
According to Chainalysis, the average amount lost in a single incident has increased 79.5%, from $5.9 million in 2023 to $10.6 million in 2024. This jump is partly due to the rise in the price of cryptocurrencies like Bitcoin, which has jumped about 130%, from $26,141 at the start of 2023 to $60,091 in 2024.
The report also revealed another alarming trend. After focusing on decentralized exchanges (DEXs) for the past four years, hackers turned their attention to centralized exchanges (CEXs) in 2024.
For example, Japanese exchange DMM suffered a $305 million Bitcoin theft in May 2024. The incident accounted for about 19% of the total amount stolen in crypto hacks that year.
At the same time, ransomware attacks have increased in 2024, with Chainalysis reporting a record $75 million crypto payment to the ransomware group Dark Angels. The transaction represents the largest single ransom payment ever recorded.
In addition, the average size of such payments has increased significantly, by 96% compared to 2023 and by 335% compared to 2022.
In July alone, hackers stole around $266 million in 16 separate breaches, causing significant damage to the cryptocurrency sector.
The attack on Indian cryptocurrency exchange WazirX on July 18 stands out. This attack alone accounted for over $230 million, or 86.4%, of the total losses for the month.
Other notable victims of July’s crypto hacks included algorithmic protocol Compound Finance ($24 million lost), bridging protocol Li.Fi ($10 million), decentralized AI protocol Bittensor ($8 million), and liquidity provider Rho Markets ($8 million).
In contrast, June saw smaller losses, with $176 million spread across around 20 incidents. This difference highlights the dramatic increase in the value of stolen assets in just one month.
