97% of Crypto Hacks Were Against DeFi Projects: Report

Chainalysis, a blockchain analyst firm, published a new report on illicit activities on blockchains. It noted that DeFi protocols are the most targeted by hackers and that money laundering has increased in this space in the last two years.

DeFi is Hackers’ Primary Target

Illicit DeFi transactions have increased steadily since the DeFi Boom, which occurred in the summer 2020. Chainalysis’s report shows that money laundering and DeFi hacking are the main criminal activities in these protocols.

The perpetrators stole $1.7 billion in digital assets, 97% of which were from DeFi protocols. Two alarming thefts were responsible for the bulk of the stash: the $600M Ronin bridge attack at the end March and the $320M Wormhole attack in February. According to the report, hackers connected to North Korea are responsible for most of the stolen funds, which total more than $840M, by 2022.

DeFi protocols have taken 69% of crypto-based funds linked to criminal activities.

According to the report, the nature of many such protocols allowing users trade tokens for other tokens was due to the difficulty in tracking digital asset movements. Criminals have also found them more attractive due to the absence of KYC requirements for many DeFi projects.

This report used the Lazarus Group, a notorious North Korean-linked group that allegedly laundered $91million worth of cryptocurrency last year through several protocols. According to reports, the group allegedly swapped stolen tokens for ETH or BTC, then transferred them to accounts on centralized platforms and cash out the assets.

NFT Wash Trading

NFT Wash Trading, a type of market manipulation that artificially increases the value of an asset that is not liquid, was another notable aspect of the report. The same entity can control multiple wallets and trade NFTs between them, creating a false impression that there is more demand for the asset than it actually is.

A report identified a case that generated more than 650,000 wETH through manipulation transactions. The report stated that the incidents were on the same platform as the marketplace, which paid incentive rewards to traders of NFTs using the native token.

By simply transacting more frequently between accounts, users could earn additional tokens. NFT collectors might be tricked into believing that the marketplace has more transaction activities than it actually does.

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Marla Brooks

Marla Brooks – Financial Analysis My name is Marla Brooks, and I am the mainstream behind the”observednews.com”  for the powerful and most delicate insights into the latest activities in the financial analysis category. I started my journey as an independent financial consultant. I had approximately nine years of experience in this field. I am free soul so; my passion for exploring the world has taken me to the nations across the globe and given me the chance to report for a portion of the best news associations. Currently, I am a full-time editor as experienced in finance and started to use my abilities.

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