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Crypto Sector Lost $3.78 Billion in 2022, According to an Analysis by SlowMist Security

SlowMist, research group, has published study detailing the security issues faced by the crypto sector over the previous year.

SlowMist, a company that specializes in the security of blockchain ecosystems and provides cybersecurity assessments and protection to blockchain apps, has just issued its yearly report on the assaults, hacks, and other types of security events that have occurred in the web3 sector.

This paper, which is titled “Blockchain Security and AML Analysis,” offers light on the present condition of web3 security and how 2022 set a record for the number of security breaches that occurred in the crypto sector.

According to the findings of the research, the blockchain sector was subjected to 303 assaults in the most recent calendar year. This figure represents a 61% drop when compared to the record numbers recorded in 2021. Because of these hacks, bad actors have been responsible for the loss of almost $3.7 billion all by themselves; this does not include crypto assets that have been lost due to the volatility of the market.

SlowMist brought attention to the fact that the most hacks were carried out in the DeFi, cross-chain interoperability initiatives, and NFT sectors:

There were 255 security incidents affecting various ecosystems, including DeFi, cross-chain bridges, and NFT. Additionally, there were ten security incidents involving exchanges, 11 incidents involving public chains, six incidents involving wallets, and 21 incidents of other types.

Blockchain Security and AML Analysis, SlowMist

According to the research, the BNB Smart Chain was the most prominent victim in 2022, with 79 separate assaults being documented on the blockchain network within that single year.

In addition to this, the research highlighted how several crypto service providers have resorted to the banning of suspicious accounts on their respective platforms in order to combat money laundering inside the crypto sector. Both Tether Limited and Circle, which are centralized stablecoin issuers, banned a total of 126 and 250 addresses on the Ethereum (ETH) network, respectively.

Design problems, rug pulls, and phishing schemes all contribute to the problem.

SlowMist also pointed out the three significant loopholes that the bad actors used to orchestrate their exploits. The first of these loopholes was through design flaws or vulnerabilities within Web3 projects. Other exploits included rug pulls, phishing, or scams, and those that resulted in asset loss due to private key leakage.

The bulk of hacks that occurred in 2022 were caused by defects in the architecture of blockchain systems. A total of 92 occurrences were documented, and the damage caused by them exceeded one billion dollars. According to SlowMist’s research, the most common tactics that malicious actors use to take advantage of insecure platforms include cons such as flash loan assaults, pricing manipulation, and validation errors.

The report also included a listing of some of the largest cryptocurrency heists that had been recorded in 2022. These included the BNB Chain exploit, which resulted in losses of $570 million; the Ronin Network hack, in which the attackers stole over $600 million; and the Wintermute DeFi hack, which stole $160 million.