Hackers are now targeting centralized exchanges after focusing on DeFi platforms in the last four years.
The amount of money stolen has also surged, with CeFi seeing the worst hacks since 2018.
Hackers are using more clever techniques, such as posing as job seekers and infiltrating companies to steal money.
Ransomware attacks in the crypto industry are also on the rise.
However, despite the increase in hacks, illegal crypto transactions are declining compared to legal ones.
The hacks and scams in the crypto space have been as harsh as ever this year, with more than a billion dollars (around $1.6 billion) stolen within the first six months.
However, under the hood, a lot more than mere hacks have been going on.
It turns out that hackers have recently been shifting their focus from DeFi protocols to Centralized Exchanges.
Considering how centralized protocols have a much wider user base than decentralized ones, could a massive disaster be brewing?
Over the last four years, DeFi platforms have been the go-to for crypto criminals, with everything from flash loan attacks, address poisoning and even social engineering on occasion.
However, according to the latest report from Chainalysis, this trend appears to be shifting, with more centralized exchanges being hacked more often.
Chainalysis reports that the hackers may have found a new goldmine in CeFi and are leveraging advanced techniques to break into these platforms.
The hacking landscape between January 2023 and July 2024
Interestingly, some of these attackers (even the ones linked to North Korea) have gone as far as directly applying for IT jobs at the companies they eventually exploit.
Once inside, these attackers bypass the security protocols of said exchange, enabling them to steal much larger and more lucrative amounts of money.
The largest single DeFi hack was on the Ronin bridge, which saw around $624 million siphoned off in 2022.
However, in June, the Japanese DMM Bitcoin hack stole around 4502.9 BTC, worth over $308 million.
Combined with the $230 million in the WazirX hack in July, a month after that, the hackers made a combined ~$540 million within a span of two months.
CeFi has the worst hacks since 2018
Chainalysis reports an alarming 84% year-on-year (YoY) increase in the value of stolen crypto, which reached $1.58 billion.
This surge is even more harsh, considering that at this time last year, there were only around 50% in YoY stolen crypto.
While the frequency of hacks has only increased by around 2.76%, the average amount of crypto stolen per incident has risen by around 79% from the previous year.
This means that the hackers are now going after higher-value targets.
Chainalysis also believes that Ransomware is a big threat, particularly in the crypto sector.
Overall, the total ransoms paid this year have reached $459.8 million, up significantly from $449.1 million around this time last year.
Maximum Ransom Payment by year
The analytics company believes this rise in ransomware activity may be linked to increased stolen funds.
On the brighter side, though, Chainalysis says that the growth of actual, legal transactions on the Blockchain is also growing and has even outpaced the illegal ones.
Blockchain ecosystems have seen a 19.6% decline in illegal transactions, bringing the total down from around $20.9 billion to $16.7 billion.
This recent shift towards centralized entities is cause for concern, considering this niche’s user base and relatively large assets under management.
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