U$3.8 billion worth of crypto stolen! What can be done?

Cross-chain bridges / Centralised smart contracts are an attractive target for hackers, in effect, they become a huge, centralized repositories of funds, ready for the taking!

2022 was a challenging year for the crypto market. After years of good results, the crypto world went through a severe bear market. During this time, many cryptocurrencies saw a sharp decrease in value, with some losing over 50% of their value (including Decred and Bitcoin). The Crypto community had to deal not only with a value decrease but also with a record of U$3.8 billion worth of coins stolen from various services last year.

The report by crypto analytics company Chainalysis blames much of the crypto theft in 2022 on North Korean hackers, estimating that criminals linked to the country stole an estimated U$1.7 billion worth of cryptocurrency last year. Interestingly, the number of crypto attacks fell from 250 in 2021 to 200 in 2022, fewer attacks but also more effective ones. October was the biggest single month ever for crypto hacking, with U$775.7 million stolen in 32 separate attacks.

South Korea's intelligence agency, the National Intelligence Service, affirms North Korea's capacity to steal digital assets is among the best in the world since the country focused on cybercrimes after U.N. economic sanctions in 2017.

According to Chainalysis, 82% of the total stolen resulted from targeting weaknesses in DeFi protocols. Cross-chain bridge protocols accounted for 64% of DeFi protocol attacks.

"Cross-chain bridges are protocols that let users port their cryptocurrency from one blockchain to another, usually by locking the user’s assets into a smart contract on the original chain and then minting equivalent assets on the second chain. Bridges are an attractive target for hackers because the smart contracts in effect becomes a huge, centralized repositories of funds backing the assets that have been bridged to the new chain" explained the report.

What can be Done?

These types of thefts have highlighted the importance of secure storage and management of cryptocurrencies. Preventing the theft of cryptocurrency requires a multi-layered approach that involves taking steps to secure both your personal information and your digital assets. Here are some steps you can take to reduce the risk:

  • Use a trustworthy wallet provider

Remember to choose a wallet provider with a strong reputation for security and encryption. Decred has its own digital Wallet Decrediton, open-source software that allows users to securely store, manage and send DCR. Besides having an intuitive and user-friendly interface, Decrediton also supports an optional privacy feature called CoinShuffle++(CSPP). No individual can obtain information about coins or their destiny with CSSP, the ownership of DCR coins is obfuscated since output addresses get anonymized.

  • Store your private keys securely

Private keys are the ones that allow access to your crypto. The most secure method of storing your private keys is to keep them in Hardware Wallets, these are flash drive-like devices designed to store digital assets. If you don't want to spend money you can also use a paper wallet: a piece of paper that prints the pair of private and public keys, just remember to keep them safe!

  • Use reputable exchanges

It`s essential to choose exchanges that have strong security measures in place, such as two-factor authentication and cold storage for customer funds. The Decred community has built its exchange DCRDEX! Users of this decentralized exchange have total custody of their coins, and no trading fees are charged on your transactions. Privacy is also guaranteed, there is no need for id verification.

With DCRDEX you can trade coins like Decred, Bitcoin, Litecoin, Ethereum and Monero
  • Educate yourself about common scams

Stay informed about the latest scams and frauds. Never share personal information or keys with anyone!

The theft of cryptocurrencies is a growing concern, but it`s possible to reduce the risk by following best practices and being proactive, always improving your security. By taking the necessary steps you can protect investments from North Korean hackers and enjoy 2023, which we hope to be an exciting year for cryptocurrencies!