Surge in Crypto Hacks and Ransom Payments Noted in 2024

In 2024, a noticeable increase in cryptocurrency hacking incidents has emerged, particularly targeting centralized exchanges. This resurgence aligns with a rise in Bitcoin prices.

Key Findings from Chainalysis

A recent report reveals that while the overall volume of illicit cryptocurrency transactions has diminished, specific forms of crypto-related crime have escalated:

• The aggregate value of illicit activity in cryptocurrencies has decreased by 19.6% year-to-date (YTD), dropping from $20.9 billion to $16.7 billion by July 2024.
• Legitimate crypto transactions are growing at a faster pace than illegal ones, driven by significant industry developments.
• Despite the overall positive trends, incidents of stolen funds and ransomware attacks have notably increased.

Increase in Hacking Activity

After a dramatic decline in 2023, cryptocurrency hacking has surged in 2024. Chainalysis reports that:

• By the end of July, the total value of stolen cryptocurrency exceeded $1.58 billion, marking an 84% increase compared to 2023.
• The number of hacking incidents has only marginally increased by 2.8%, however, the average loss per hack has skyrocketed by 79.5%, from $5.9 million to $10.6 million.

This trend has been influenced by rising cryptocurrency prices, with Bitcoin seeing an average price increase of approximately 130% from the previous year.

Targeting Centralized Exchanges Again

Additionally, hackers are returning to centralized exchanges (CEX) after an extended focus on decentralized platforms. Notable incidents include:

• The DMM exchange in Japan suffered a hack that resulted in a loss of $305 million in Bitcoin, accounting for about 19% of the total cryptocurrency stolen in 2024.

This shift may be linked to increased trading volumes on CEX platforms, as they hold significant amounts of user funds, making them attractive targets for cybercriminals.

Record Levels of Ransom Payments

Ransomware attacks in the cryptocurrency space have also intensified. Some highlights include:

• In July 2024, a $75 million payment to the ransomware group Dark Angels set a record for the largest single payment ever documented.
• The amount paid in ransomware attacks has surged by 96% compared to 2023 and 335% from 2022.

The majority of these ransomware payments are conducted using cryptocurrencies, particularly Bitcoin, raising concerns about the growing use of crypto as a payment method for illicit activities.

Examples include a significant $25 million Bitcoin payment made by CDK Global in June 2024, illustrating the trend toward using cryptocurrency for such transactions.