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Crypto hackers stole billions; why this is a growing problem

Hackers have already stolen almost $2 billion worth of cryptocurrency in 2022 – and the year is only half over.

In July, $1.9 billion worth of crypto was stolen by hackers, according to Chainalysis’ “Mid-Year Crypto Crime Update.”

By this point last year, hackers had stolen $1.2 billion, according to the report. That’s a spike of nearly 60% from a year ago.

“Despite the misconception that cryptocurrency is anonymous, it’s still easier to get away with coins or tokens,” says Max Krupyshev, co-founder and leader of crypto payment ecosystem CoinsPaid. “I don’t think crypto hackers are any stronger than the ‘usual’ types, it’s just that crypto platforms are new and hold valuable assets.”

According to the report, malicious actors are increasingly targeting decentralized finance (DeFi) protocols, which are particularly vulnerable to hacking. DeFi programs are the underlying blockchain technology that allows financial transactions to happen outside of traditional banks. These programs mainly use the Ethereum blockchain.

DeFi programs are public and use open-source code, which can be useful as it usually allows security issues to be discovered and fixed quickly.

However, since the open-source code is available to everyone, cybercriminals are able to thoroughly study the code and find vulnerabilities that can be exploited and used to steal crypto funds, according to the report.

And hackers are not expected to stop anytime soon. They have already stolen $190 million from crypto startup Nomad and $5 million from multiple Solana digital wallets in the first week of August, reports Chainalysis.

“The only way to stop them is for the industry to step up safety and educate consumers on how to find safe projects to invest in,” the report advises.

There are many virtual wallets that can store your crypto securely and also protect it from online attacks, says Krupyshev. However, it is important to do some thorough research first to determine which type of wallet is right for you.

It is also crucial to do your own research before investing in anything to avoid potential scams.

There are “false opportunities and Ponzi [schemes] glowing with their neon lights everywhere,” Krupyshev warns. “No secure wallet can save a young investor from them.

Additionally, law enforcement must continue to develop their ability to seize stolen cryptocurrency so that hacks are no longer attractive to cybercriminals, reports Chainalysis.

Although many investors are attracted to the unregulated nature of cryptocurrency, the lack of a central regulatory authority means that investors generally do not enjoy the same protections offered by traditional financial institutions such as banks. .

And remember, crypto assets can be highly volatile and subject to wild price valuations. There is no guarantee of making a return on your investment, which is why experts recommend investing only as much as you are willing to potentially lose.

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