$1.3 Billion in Crypto Stolen in Q1 of 2022, 97% from Defi Protocols: Report

$1.3 Billion in Crypto Stolen in Q1 of 2022, 97% from Defi Protocols: Report

 

$1.3 billion in digital currencies were stolen during the first quarter of 2022, according to a research report. The study, published by cryptomonday.de researchers, further highlights that 97% of the stolen funds are derived from decentralized finance (Defi) protocol exploits.

Defi Exploits Account for Lion’s Share of Stolen Crypto

2022 is already breaking records in terms of stolen cryptocurrencies from hacks and exploits. Last year, $3.2 billion in digital currencies were stolen, and so far, 2022 has recorded over 40% of 2021’s aggregate during the first quarter alone. The recorded stolen crypto data stems from a report published by cryptomonday.de and the study’s author, Elizabeth Kerr. The report’s author says "the numbers signify a major spike."

For instance, out of the $1.3 billion in digital currencies stolen this year, 97% of the funds were taken from Defi protocols. In Q1 2021, only 72% of the stolen funds derived from Defi, and in 2020, the number was as low as 30%. Moreover, most of the theft in 2022 came from faulty code exploits where smart contract errors have been used to siphon stolen money from Defi protocols. The author says that because the Defi environment is open source, anyone can search for vulnerabilities and errors within a Defi projects codebase.

Centralised Exchange Hacks Have Decreased Significantly

The research further details that, in previous years, centralised exchanges were popular honeypots, but attacks on centralised trading platforms have declined. "[Centralised exchange attacks] now only account for less than 15% of the [stolen] cryptos," Kerr writes.

The report also notes that common Defi protocol hacks come in the form of flash loan attacks and security breaches. The report’s author further mentions the Ronin Bridge attack, which saw a loss of over $600 million.

"Hackers and cyber criminals made more than $3.2 billion last year, and we just might have a higher amount stolen this year, if the first quarter data is an indication to follow. The need for tighter security measures grows by the day, especially since more people are coming aboard, "Jonathan Merry, CEO of Cryptomonday, explained in a statement.