The most concerning increases in cryptocurrency-related crimes have been to DeFi protocols, which have lost a record 1 billion fiat to North Korea-linked groups. DeFi protocols are decentralised finance (DeFi) protocols made up of specialised autonomous computer programmes aimed to address challenges in the finance industry in traditional circles. They would make it possible to trade cryptocurrencies between protocols, allowing for the payment of products and services in cryptocurrency.
As was demonstrated in 2022, these protocols are susceptible to attacks, especially in cross-chain bridges. The data for 2022 has been released by TradingPlatform.com, and it reveals that while North Korea is responsible for about 1 billion worth of cryptocurrency in 2022 alone, some thefts are carried out by highly competent hacker groups like the Lazarus Group.
There have been numerous attacks on DeFi platforms, according to analyst Edith Reads of TradingPlatform.com. The attacks are expertly planned & coordinated. However, various players in the crypto industry have put steps in place to address this. More than $30 million in stolen cryptocurrency has been recovered from North Korean hackers, gives hope. It is a win for cryptocurrency enthusiasts. It will improve investor confidence and perhaps attract individuals who have reservations about crypto security.”
The crypto industry has seen a decline in illegal activity.
Despite the overall decline in the value of digital assets, one of the more concerning aspects is that cryptocurrency crime appears to be expanding. TradingPlatforms.com reports that while legitimate transactions decreased by about 35%, criminal transactions decreased by 15%.
In March 2022, hackers stole almost $600 million from the Ronin bridge of Axie Infinity. Just three months ago, in June 2022, The Horizon Bridge of Harmony lost more than $100 million.
Hackers continue to pose a serious concern, despite the fact that crime in the cryptocurrency sector has drastically declined. North Korea stole $1.6 billion in cryptocurrency in cryptocurrency-related frauds, which is 66% less than the $4.3 billion stolen in 2021. The 43% decline in revenue on darknet marketplaces this year was also a result of the Hydra marketplace crackdown in April.
The varied dips in criminal activity in crypto may be related to crypto winter, a period in which crypto market values and activity fall, usually during the winter months.
Because there is less money to be made from their schemes, criminal behaviour is typically thwarted by the crypto winter and other market slumps. Watch out for investments with returns that look too wonderful to be true; they probably are. The cryptocurrency game is still in its infancy, so values and investments will experience ups and downs as the market situations. After doing your research, invest prudently.