The year 2022, will be written in the dark books of crypto investment updates. The losses made due to crypto thefts and crypto frauds in investments this year can not be recovered for a long time. Cryptocurrencies have always been considered an unstable asset; this year, they have been proven with multiple examples. However, a few factors are responsible for the effect and these mostly include the crypto frauds that tend to steal money from crypto investors.
This year, crypto frauds have caused a loss of funds summing to around $3 Billion. The loss of this amount didn’t happen at once as it took 125 hacks to contribute and cause the loss of such a significant amount.
3/ Back in 2019, most hacks targeted centralized exchanges, and prioritizing security went a long way. Now a vast majority of targets are #DeFi protocols. pic.twitter.com/efSKCkhnm2
— Chainalysis (@chainalysis) October 12, 2022
As per the reports from Chainalysis, the crypto frauds in 2019 were majorly caused due to centralized currency. However, in 2022, almost all the losses in the year were caused due to decentralized funds. The decentralized funds altogether took part in two-thirds of the crypto asset loss in 2022. Moreover, the top 5 crypto frauds have caused around 49% of the total loss from crypto tokens, accounting for $1.49 billion.
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Here’s a list of crypto frauds and scams that led to the demolition of crypto assets in 2022;
Ronin Network: $625 Million
The largest theft of the year occurred on the Ronin Network, a blockchain that underpins the non-fungible token-based video game Axie Infinity, when more than $500 million worth of ether and USD currency were taken. The computers that handle network transactions are known as nodes, and according to Ronin, the attackers were able to hack them.
The activity went undiscovered until a user encountered difficulties withdrawing money and reported it. Later, the Lazarus Group, a hacker group supported by the North Korean government, was implicated in the crypto fraud by the US Treasury Department.
Wormhole Network: $325 Million
Wormhole Network, a bridging technology that enables users to transport cryptocurrencies and NFTs between numerous pairings of blockchains, was vulnerable on February 2 and was taken advantage of by an unidentified hacker.
Chainalysis reports that the perpetrator seems to have discovered a bug in Wormhole’s code that allowed them to issue 120,000 wETH—an equivalent of ether tokens on the SolanaSOL -0.3% network, valued at around $325 million at the time of the theft—without providing the required collateral. The parent business of Wormhole, Jump Crypto, replaced the stolen funds after offers to pay the hacker a bounty in exchange for the assets were rejected.
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Nomad: $190 Million
On August 1, a hacker exploited a flaw in Nomad’s code by creating a message that persuaded the cross-chain protocol to deliver stored tokens without the required authorization.
The issue was so easy to exploit that no programming knowledge was even necessary. Numerous imitators soon joined the heist. Nomad successfully recovered more than $20 million crypto fraud by pleading with consumers to refund the money.
Beanstalk Farms: $182 Million
In April, a hacker was able to steal more than $150 million in crypto fraud from Beanstalk Farms, a stablecoin project built on EthereumETH +0.1% According to blockchain security company CertiK, the attacker borrowed almost $1 billion in cryptocurrency through a flash loan obtained through the decentralized protocol AaveAAVE -2.1% and then exchanged that for a 67% voting stake in Beanstalk.
Flash loans let users borrow large sums of cryptocurrency for brief periods of time. The hacker was able to move the Beanstalk tokens to their own cryptocurrency wallet with a supermajority. The entire transaction took place in less than 13 seconds, which is comparable to the length of an Aave flash loan.
Wintermute: $160 Million
A crypto fraud on September 20 cost the market maker with headquarters in England $160 million. Evgeny Gaevoy, the founder and CEO of Wintermute, claimed that the attack most likely started with a service called Profanity that Wintermute had utilized. Profanity creates “vanity addresses” for digital asset accounts to make them simpler to work with than the standard 30-character strings of various letters and numbers.
These trading accounts were a component of Wintermute’s DeFi operation, which it uses to execute quick deals on decentralized exchanges like Uniswap and SushiSwap. It appears that hackers were able to generate every password for a firm vanity address using brute-force computing.
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Mango Markets: $112 Million
According to Mango, the crypto fraud utilized Eisenberg’s two accounts with the dollar-pegged USD token on the platform. Mango established sizable bets in perpetual futures on the coin by selling from one account and buying in another at a premium over the market price. He leveraged the unrealized profit to borrow and withdraw a number of tokens from Mango itself while the token’s price multiplied tenfold on other decentralized marketplaces.
BNB Smartchain: $110 Million
Following a planned update, BNB Smart Chain (BSC) and BNB Beacon Chain were both victim of the crypto fraud. Analysts and on-chain data show that the hackers were able to fabricate permission messages and deposit the monies into their accounts by effectively utilizing a flaw in the bridge’s verified proofs. While attempting to drain the bridge of $560 million, the hackers were able to create 2 billion BNB tokens, but they only succeeded in removing $110 million off-chain.
Harmony Horizon Bridge: $100 Million
Harmony Bridges underwent a theft case where their assets were exposed to hackers. The hackers took out $100 billion of the crypto assets in 14 transactions caused by breaching the company’s software and caused the crypto fraud. However, the company was already working on its system to secure itself against such threats but it seems they left a slight opening for the hackers to let in.
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