Cyber Money: Thefts in The Hundreds of Millions Every Year | Total Security

Over half a billion dollars worth of cryptocurrencies were stolen globally in 2020 - a 38 percent increase. The operators of crypto exchanges are constantly improving their security mechanisms. But the bad guys are also learning.

According to calculations by the British information portal Trading Platforms UK, the value of the cyber currency stolen by hackers rose from 370.7 to 513 million US dollars between 2019 and 2020, which corresponds to an increase of a good 38 percent. The sad climax of the past five years was marked in 2018, in which cryptocurrency worth almost one billion US dollars was stolen.

The Lithuanian journalist and fintech expert Justinas Baltrusaitis comments on the figures: "In the past year, cryptocurrency was increasingly noticed by the mainstream, at the same time this sector was accompanied by multi-million dollar hacks and thefts."

Fraud on The Blockchain Declined

If you take a look at the numbers that Baltrusaitis calls, then - similar to the price of Bitcoin and Co. - a strongly fluctuating picture emerges. Summarizing all other cases of fraud and embezzlement related to blockchain-based financial products, the damage decreased from $ 4.4 billion in 2019 to $ 1.3 billion a year later. The direct theft of cyber money is therefore only a relatively small part of the whole process.

According to the experts, the overall falling numbers show the increasing maturity of the industry and its growing ability to ward off security threats. This now also includes good contacts with law enforcement authorities.

The interest of hackers is increasingly shifting from cryptocurrency exchanges and digital wallets to the DeFi area. DeFi stands for "decentralized financial services" and describes a financial sector that is based on blockchain technology and is seen by many experts as serious competition for the existing banking industry. Typical DeFi applications are, for example, open credit exchanges in which customers receive loans based on smart contracts or stable coins as financial investments that can be secured with specific tangible assets. 

Open Source Attracts Criminals

Many of these DeFi solutions rely on open access and open source code, which offers potential hackers possible points of attack. Also, the start-ups behind new DeFi products strive for the broadest possible interoperability with other services to make their business model more attractive to investors. Compared to the monolithic architecture of traditional banking houses, this makes many DeFi projects more transparent, but also more vulnerable.

Fraud attempts under the guise of Covid 19 also reached significant proportions: Fraudsters posed as celebrities and collected crypto donations - which then disappeared undetectably. A scam seems almost bizarre, in which unknown perpetrators broke into the official Twitter accounts of celebrities such as Barack Obama, Joe Biden, or Elon Musk in mid-July 2020 and promised every cryptocurrency worth $ 2,000 in their name to the previously sent cyber money worth 1,000 euros.

Baltrusaitis explains the sharp decline in the volume of blockchain fraud between 2019 and 2020 with the increasing pressure of persecution from the authorities who implemented laws against money laundering. A proposal by the US financial supervisory authority from December 2020 stipulates that both sender and the recipient must be known in the future for transactions via crypto file exchanges - which would be a tough chunk for many fans of Bitcoin and Co. 

Protect your device from hackers and cyber theft by installing advanced software like Total Security.