Thefts across DeFi platforms leaped 1,330% in 2021: Report
2021 saw $3.2 billion worth of cryptocurrency stolen by individuals and services which was six times more than the amount stolen in 2020, as per a Chainalysis Crypto Crime Report 2022. The report highlighted that hacks on decentralised finance (DeFi) platforms accounted for $2.3 billion of the stolen funds.
Insights from the report stated that 2021’s cryptocurrency based thefts were due to security breaches where hackers got cyber access to the victims’ private information, which was done using techniques such as phishing, keylogging, social engineering, among others. Moreover, around 30% of all cryptocurrency related thefts happened via this kind of hack between 2019 and 2021. In 2021, price manipulative attacks such as code exploits and flash loan attacks accounted for 49.8% of cryptocurrency stolen across different services, which increased to 69.3% when hacks on DeFi platforms were taken into account. While DeFi protocols move funds without human intervention, cyber criminals benefit from the vulnerabilities and plan exploits in the platforms’ servers.
The report’s data stated that influence of price oracles, which provide the information required for smart contract execution, on DeFi platforms contributed towards cryptocurrency based thefts. In 2021, price oracles caused flash loan attacks which led to thefts worth $364 million from DeFi platforms.
Between 2020 and 2021, lending platforms such as yield farming protocols accounted for $923 million in stolen funds from 64 theft incidents. 51% of stolen funds were flown to DeFi platforms, whereas risky services and centralised exchanges accounted for 25% and around 15% respectively. As per information from the report, 10 largest hacks of 2021 accounted for $1.81 billion of stolen funds, and seven of these 10 attacks were aimed towards DeFi platforms.
(With insights from the Chainalysis Crypto Crime Report 2022)
