North Korea's Crypto Campaign: Increased Targets, Diminished Returns in 2023

In 2023, North Korea escalated its assault on crypto platforms, setting a record of 20 hacks, despite a reduced overall loot compared to 2022. Chainalysis' recent report reveals the nuanced dynamics of this crypto onslaught.

Record High Hacks, Lower Booty

North Korea's hacking spree reaches unprecedented heights

The number of hacks peaked at 20 in 2023, coinciding with the broader crypto market downturn. Despite a substantial drop in stolen funds by 54.3%, totaling just over $1 billion, the spike in individual incidents paints a picture of increased audacity.

Diversified Targets, Varied Gains

North Korean hackers pivot towards DeFi platforms

While the total stolen crypto decreased, North Korean hackers diversified their targets. They honed in on decentralized finance (DeFi) platforms, pilfering approximately $428.8 million, and also targeted centralized services, exchanges, and wallet providers, amassing $150 million, $330.9 million, and $127 million, respectively.

DeFi's Decline: A Key Trend

DeFi platforms witness a significant reduction in 2023

The targeting of DeFi protocols saw a drastic decline in 2023, aligning with a global decrease in DeFi-related incidents. The stolen funds from DeFi platforms dropped by 63.7% year-over-year, amounting to $1.1 billion, marking a stark contrast to the $3.1 billion stolen in 2021 and 2022.

Unpacking DeFi Attack Vectors

Understanding the methods behind the attacks

Chainalysis, in collaboration with Web3 and Halborn, identified two main categories of DeFi attack vectors: on-chain and off-chain. Smart contract vulnerabilities were a predominant factor in most DeFi hacks, often stemming from inadequate audits or a lack thereof.

Security Challenges: Smart Contracts and Private Keys

Weak smart contract audits and compromised private keys contribute to the surge

Mar Gimenez-Aguilar, Lead Security Architect at Halborn, emphasized that a significant portion of DeFi hacks resulted from flaws in smart contract design and implementation. Compromised private keys also played a crucial role, highlighting the need for comprehensive security practices beyond individual blockchain boundaries.

The persistent cyber onslaught by North Korea is a cause for concern, reflecting the need for enhanced security measures across the crypto landscape. The decline in DeFi attacks is positive, but the overall scenario demands collective vigilance and robust security protocols.