The cryptocurrency sector has been highly volatile, with price fluctuations, numerous coin failures, and a major exchange closure. Additionally, it faces increasing cyberattack threats. Researchers from Vienna’s Complexity Science Hub and the University of Montreal report that damage from the attacks has surpassed $30 billion globally and keeps increasing.
DeFi sector targeted by cybercriminals
Criminal activities within the (Decentralized Finance) DeFi sector have been widely reported, and the lack of a governing body to address the crimes has made it difficult to assess the full extent of the damage.
According to Bernhard Haslhofer, who leads the Cryptofinance Research Group at the Complexity Science Hub, a comprehensive assessment of the overall damage has been challenging due to the absence of a centralized contact point.
In the research project, scientists collated documented instances of criminal activities within the cryptocurrency industry by consulting diverse databases. Their efforts led to the discovery of a grand total of 1,155 criminal incidents that transpired during the period spanning 2017 to 2022.
Haslhofer said that it’s worth noting that the possibility of additional unreported cases cannot be ruled out. As such, it is essential to acknowledge that all the findings presented herein represent the lower threshold of potential occurrences.
Cyber-criminal activity in DeFi sector rising
The cumulative cost of these events is a staggering $30 billion, which is equivalent to Luxembourg’s annual revenue in 2022. While there may be more incidents not accounted for, these 1,155 cases represent one of the most extensive collections of scrutinized events.
Catherine Carpentier-Desjardins from the University of Montreal describes this as the first step in evaluating the scale of illicit activities within the DeFi realm. The data also reveals a troubling trend of increasing unlawful actions, with only 16 cases in 2017, rising to 308 in 2021, and further escalating to 435 reported transgressions in 2022.
Researchers found that in 50% of the attacks, damages exceeded $356,000, with the smallest breach at $158 and the largest at $3.6 billion. The most significant loss was linked to South African centralized digital platform Africrypt, which serves functions as a cryptocurrency exchange for both fiat and cryptocurrencies.
