DeFi security losses rose 47.4% in 2022 to hit $3.64B: Report

According to a Jan. 5 report released by Chinese blockchain security company LianAn Technology, decentralized financing (DeFi) exploits throughout blockchains worldwide amounted to $3.64 billion in 2022. This represented an increase of 47.4% compared to the loss of $2.44 billion in 2021. The incidents increased in quantity despite a high 80% loss in the total value locked in DeFi during the year.

Out of the 2022 quantity, funds lost throughout cross-chain bridge hacks totaled up to $1.89 billion throughout 12 incidents– the greatest in the category. Overall, attacks on Ethereum, BNB Chain and Solana represented most of exploits.Out of the 167 significant occurrences in 2022, 51.5% of breaches took place in audited projects, while 48.5% of breaches occurred in non-audited jobs. In total, LianAn said 38.7%, or $1.40 billion, of stolen funds were laundered through cryptocurrency mixer Tornado Cash. Just $289 million worth of funds were recuperated throughout the year. Nevertheless, the number is likely greater, as numerous recoveries have yet to be openly revealed per police requests.

Overall worldwide blockchain-related criminal activities (monetary criminal offenses left out) totaled up to $13.7 billion in 2022. Incidents of money laundering topped the list with $7.33 billion, followed by DeFi exploits ($3.6 billion), multilevel marketing frauds ($1.0 billion) and scams ($830 million). Aside from the collapse of cryptocurrency exchange FTX, there were 243 events of scams and rug pulls during the period, with $425 million associated with total.

“2022 was a grim year for the security of the global blockchain market. This causes a greater and more important need for security expectations in 2023. How to respond versus hacker attacks, how to rapidly build an international regulative structure, and how to apply technical developments to solve security dangers are all pressing issues we must consider and deal with in 2023.”