As the cryptocurrency market expands, so does the risk of cybercrime. According to blockchain analytics firm Chainalysis, hackers have stolen more than $3 billion in cryptocurrency for 2022, breaking the previous record of $2.1 billion set in 2021. With a significant portion of that, $718 million, stolen in 11 different hacks in October 2022, it is clear that cybercrime in the cryptocurrency space is growing at an alarming rate.
Cross-chain bridges have been a popular target for hackers in recent years. These bridges allow investors to transfer digital assets and data between blockchains, and they store a large number of cryptocurrencies, creating a larger and more complex arena for hackers to infiltrate. In fact, three cross-chain bridges were breached in October 2022, resulting in the theft of nearly $600 million, accounting for 82% of losses for that month and 64% of losses for the year.
Last May, Binance, one of the world's largest cryptocurrency exchanges, was hacked, resulting in a loss of $570 million in cryptocurrency.
Another significant hack occurred in August 2022, when Nomad lost nearly $200 million. Both of these attacks were carried out by hackers who took advantage of security flaws in the cross-chain bridge transaction protocols.
Crypto.com, Harmony, Wormhole, and Ronin Network are among the other cryptocurrency platforms that have been hacked in 2022. According to Chainalysis, there were more than 125 hacks last year.
It is worth noting that cryptocurrency, unlike bank accounts, is not federally regulated or FDIC-insured, which means that if your account gets hacked, the government will not work to restore your funds.
As an investor, you must take all the necessary precautions to protect your digital assets from cybercriminals. Using strong passwords and two-factor authentication, storing assets in hardware wallets, and regularly monitoring accounts for any suspicious activity are all part of this.
You should also diversify your portfolios and not keep all of your crypto assets in one place. Storing assets across various channels and devices can help to reduce the risk of total loss in the event of a hack.
Furthermore, cryptocurrency exchanges and other platforms must prioritize security and update their systems on a regular basis to protect against potential vulnerabilities. Binance CEO Changpeng Zhao acknowledged the industry's vulnerability when assets are moved from one blockchain to another and stated that the goal is to learn from the hack and develop additional safeguards in the future.
Self Custody
Having a hardware wallet, such as a Ledger, can be an excellent defense against stolen cryptocurrency because it allows you to store your digital assets offline, away from a hacker's reach. These wallets are small, portable devices that look like USB drives and are intended to store your private keys offline. connect the device to your computer and enter a password to gain access to your crypto. Because hackers would need to physically possess your hardware wallet in order to access your private keys, this added security measure makes it much more difficult for them to steal your funds.
One of the most significant advantages of using a hardware wallet like a Ledger is that it adds an extra layer of security beyond a password. Even if a hacker obtains your password, they will not be able to access your funds unless they have access to the physical device. This is because a hardware wallet generates a unique private key for each transaction, which is then stored offline on the device.
Another advantage of using a hardware wallet is that it allows you to store multiple types of cryptocurrency. A Ledger Nano S, for example, can store Bitcoin, Ethereum, Litecoin, and other popular altcoins. This makes it an excellent solution for those who own multiple types of crypto assets and want to keep them all in one place.
Hardware wallets, such as Ledger, not only add an extra layer of security, but also make it simple to keep track of your cryptocurrency. The free Ledger Live software allows you to easily view your balances, transaction history, and other important information, which makes it simple to keep track of your investments.
Matt is the founder of TechMalak. When he's not buried face-deep in the crypto charts you can find him tinkering with the latest tech gadgets and A. I tools. He's a crypto investor and entrepreneur. He uses a mixture of A.I and human thought and input into all his articles on TechMalak, further merging man with machine.
