Breaking: Crypto hacks led to $9.8 billion in losses in 2021

2021 has certainly been the year of mainstream crypto adoption that institutions have finally realized that this is not a fad and is going to become the alternative financial market. However, with the rise in interest and adoption, the number of breaches and hacks has also reached new heights. according to the latest report from slowmist, crypto hackers managed to get their hands on a whopping $9.8 billion dollars stolen in various breaches and ransomware attacks.

the slowmist yearly report also highlighted that the majority of the crypto hacks came from one particualr industry i.e decentralized finance (defi). Almost 73% of all money stolen by cryptohacks came from various challenge protocols totalling close to $7 billion.

The annual report noted a total of 231 incidents of hacking and security breaches in the crypto ecosystem, and all of these 231 incidents, 171 were reported using different challenge protocols. While the defi ecosystem has developed to become one of the most important use cases of the crypto ecosystem, it is also one of the most exploited. There has not been a single week in the last year in which there has been no breach of security.

Can the crypto ecosystem improve security against hackers?

The challenge area was definitely the biggest security concern because of the anonymity factor, however, it is also important to point this out, some of the biggest heists in crypto was ultimately returned due to the decentralized nature of the blockchain where it became near impossible for the hacker to launder money out of the systems. the prime example of this is the biggest defi hack in the form of polynetwork where the hackers managed to get their hands on assets worth more than $600 million.

The protocol alerted all exchanges and stablecoin issuers about the hacking address which resulted in the blocking of any transactions from that account and later all the stablecoins were also frozen. As a result, the hacker was left with no other option but to return the money and get a white hack bonus instead.

about author

prashant jha

With a degree in engineering, Prashant focuses on the British and Indian markets. As a cryptojournalist, his interests lie in embracing blockchain technology in emerging economies.