As a seasoned analyst with over two decades of experience in cybersecurity and digital assets, I have witnessed the evolution of the crypto landscape from its infancy to its current status as a global financial force. The recent surge in crypto scams, hacks, and exploits is a stark reminder that the Wild West nature of this industry has not entirely disappeared.
2024 saw an approximately 21% rise in crypto-related losses due to scams, hacks, and exploits compared to the previous year, as reported by cybersecurity experts. This year, criminals have been focusing more on centralized platforms and private keys.
Others caution that unchecked advancements in AI technology and quantum-related security risks might escalate existing problems.
On December 19, according to a blog post by Chainalysis, a total of $2.2 billion was reported as stolen in the year 2024. This figure was derived from 303 separate incidents that occurred throughout the year, marking an increase from the 282 incidents recorded in the previous year, 2023.
“It was noted that the level of crypto hacking changed significantly around mid-year, with the total value stolen in the first seven months accounting for nearly three-quarters of the annual total ($1.58 billion).
It’s worth noting that the decentralized finance (DeFi) sector fared somewhat better, as the centralized finance (CeFi) sector faced a significant surge – approximately 10 times the normal rate – in security incidents over the past year, according to cybersecurity firm Cyvers, as reported by CryptoMoon.
This year, institutional investors and conventional financial companies have begun re-evaluating their views on cryptocurrencies, yet for numerous entities, they remain an investment considered risky.
Among the significant cyber attacks on centralized exchanges this year, the Indian WazirX heist in July stands out as one of the costliest, resulting in damages amounting to approximately $235 million. Similarly, the Japanese exchange DMM experienced a loss of around $305 million worth of Bitcoin in a private key breach back in May.
In the month of February, the South Korean platform for NFTs and game development called PlayDapp experienced a breach where their private keys were leaked, leading to estimated losses amounting to approximately $290 million.
Some other significant breaches and attacks were experienced by various platforms. For instance, the DeFi network Hedgey Finance suffered a breach in April, resulting in a loss of approximately $44 million. In June, the Turkish BtcTurk platform’s hot wallet was attacked, leading to potential losses of up to $55 million. Additionally, the Singaporean exchange BingX experienced a hack in September, with losses amounting to roughly $52 million.
2024 witnessed a significant change in the focus of cryptocurrency attacks, as centralized institutions increasingly became the primary targets, according to Jean Rausis, a cybersecurity expert and co-founder of the decentralized finance platform SMARDEX, as he shared with CryptoMoon.
In the year 2024, it was discovered by Chainalysis that about 43.8% of all cryptocurrency thefts were due to the breach of private keys, making this the most common cause.
The company stated that by considering the massive DMM Bitcoin heist worth approximately $305 million, which ranks among the biggest cryptocurrency thefts ever recorded, it’s plausible that such an incident might be linked to careless handling of private keys or insufficient security measures.
In addition to the well-publicized disasters, numerous lesser-known incidents such as hacking attempts and scams have occurred this year. These include swindles like pig butchering, false airdrops, and SIM swap attacks.
This year, vulnerabilities in blockchain bridges persisted as a major point of attack, while intricate scamming techniques and phishing attempts, frequently orchestrated using artificial intelligence, were employed to trick people and cryptocurrency wallets.
Rise of AI-driven crypto scams
Rausis noted that as cybersecurity measures advance, so do the ways in which hackers can attack, a trend he finds especially worrisome given the growing adoption of AI by criminals. This allows them to continuously innovate new forms of phishing scams and automated assaults. He anticipates more high-profile attacks in the coming year.
“This means both CeFi platforms and DeFi protocols will have to keep upping their game in 2025, and I wouldn’t be surprised if we keep seeing more and more sophisticated high-profile hacks over the coming years.”
According to Phil Larratt, Director of Investigations at Chainalysis, as we move into 2025 with the ongoing bull market, a significant rise in criminal activities will likely be one of the major hurdles that the cryptocurrency industry must address next year.
Lessons learned from 2024
There are a number of takeaways from this year’s grim cybersecurity record.
Ensuring multifactor authentication is vital when it comes to safeguarding cryptocurrency assets, whether you’re an individual or a business. It’s essential that users remain vigilant against uninvited messages and suspected phishing scams, especially those claiming to be from customer support teams of crypto exchanges.
This year, cold storage and personal custody solutions have attracted attention, particularly with MicroStrategy’s founder, Michael Saylor, instigating a discussion over whether large financial institutions should be responsible for safeguarding Bitcoin.
Although utilizing specific hardware wallets like Ledger can provide added security, it doesn’t eliminate the risk of phishing attacks entirely. In fact, these attacks may become more prevalent, given that Ledger experienced a database breach in 2020, which has not ceased since then.
Quantum computing, AI attack vectors
Meir Dolev, a co-founder and CTO at Cyvers, along with the company’s lead blockchain expert Hakan Unal, underscored the significance of implementing sophisticated security methods like real-time risk detection, crosschain surveillance, and proactive defense mechanisms to tackle escalating threats.
“Emerging threats like AI-driven attacks and quantum vulnerabilities highlight the need for proactive measures and stronger regulatory oversight to protect digital assets.”
2025 is expected to see a progression in the types of attack methods, with artificial intelligence playing a significant role. This could involve advanced phishing schemes, deepfake frauds, and malware that can elude detection.
Additional types of potential threats that might emerge are supply chain intrusions, weaknesses in Internet-connected devices (IoT), exploitations of cloud services and APIs, as well as risks posed by quantum computing developments.
Though quantum computing is not yet fully developed, it could potentially pose a future threat to our current encryption methods. It’s important that we take action now and transition to quantum-resistant encryption techniques instead.
On December 9th, the search colossus Google presented a novel quantum computing chip named Willow, asserting its ability to exponentially reduce errors and perform certain calculations at an astonishingly rapid speed.
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2024-12-19 16:17