With the price of Bitcoin hitting record levels and a new, crypto-friendly U.S. administration waiting to take power, the crypto sector appears to be resurgent — yet crime in the sector remains vibrant too.
According to new data from Chainalysis Inc., the value of funds stolen from crypto platforms this year is up 21% to an estimated US$2.2 billion. The number of individual hacking incidents also rose by 7.4% this year, it noted.
However, crypto hacking trends shifted in mid-2024, the firm said.
By July, the amount of stolen crypto had almost hit US$1.6 billion, and it was on track to reach record levels for the full year. However, hacking activity slowed significantly in the second half of the year, it reported.
Chainalysis attributed the slowdown to a pullback in activity by North Korean hackers, which allegedly accounted for over half of all the crypto stolen in 2024, roughly US$1.3 billion worth — more than double the total attributed to North Korea in 2023.
However, activity by North Korean hackers dropped by about 53.7% after July 1, it said, while hacks from other sources rose by about 5%.
The shift coincided with a summit between North Korea and Russia, Chainalysis noted, which may have altered North Korean activity.
“We began the year on pace to be among the worst on record for stolen funds. Starting around July, however, we observed hacking volumes drop precipitously, coinciding with Putin’s meeting with Kim Jong Un,” said Eric Jardine, head of cybercrimes research at Chainalysis, in a report.
Regardless, Chainalysis said that the increase in stolen crypto highlights the need for stronger security in the sector.
In particular, the firm reported that compromises of private keys — ostensibly secure, randomly generated passwords used to access crypto accounts — were involved with 43.8% of the crypto theft in 2024.
“Private key compromises remain a significant concern, especially as larger institutions begin to participate in the cryptocurrency ecosystem,” Jardine added.
At the same time, the report noted that as crypto regulatory frameworks continue to develop, platform security and customer asset protection are likely to gain more attention and scrutiny.