FinTech News
Report Suggests Two Groups Responsible for Majority of Crypto Hacks
As the popularity and awareness of cryptocurrencies has increased in recent years, media coverage of hacks and other thefts has also been elevated. This might make it seems as though crypto hackers are common and widespread. However, according to a new report by Chainalysis, as covered by Fortune, the majority of these hacks can likely be attributed to two groups. What’s more, both are apparently still active.
Chainalysis suggests that 60% of all reported cryptocurrency hacks are the work of just two groups. In total it is believed that these hackers are responsible for more than a billion in stolen assets, with each individual hack averaging out to $90 million. Interestingly the site also notes that, although some of their methods have been repeated, they’ve also varied widely.
Painting a better picture of what they believe the first of these hacking groups to be like, Chainalysis wrote, “We suspect that one of the prominent hacking groups, which we’ll refer to as group Alpha, is a giant, tightly controlled organization at least partly driven by non-monetary goals.” As for the other, they note, “By contrast the second hacking organization, group Beta, seems to be a less organized and smaller organization absolutely focused on the money. They don’t appear to care very much about evading detection.” On that note, both groups have yet to be caught.
The report goes on to describe some of the efforts these groups make to “launder” stolen currency. First it is said that the groups wait for more than a month to move funds, “waiting until interest in the theft has died down,” as Chainalysis puts it. Then funds may be moved between various wallets and exchanges upwards of 5,000 times according to Fortune. In the end it’s estimated that at least 50% of ill-gotten funds are converted to cash within 112 days.
As intriguing as Chainalysis’ theory and report is, they do admit they could be wrong. In any case one thing that’s certain is that the publicity generated by such hacks isn’t doing the cryptocurrency market any favors in terms of price or public acceptance. Despite a few businesses and startups that have touted everyday applications for blockchain and crypto, to many, these hacks still show the “wild west” side of cryptocurrencies that few are interested in. Looking on the bright side, while these hackers are clearly in the wrong for their actions, hopefully these breaches can help exchanges and assets continue to improve their security. It may be a hard lesson to learn but, sadly, it may be necessary to work out the bugs now before cryptocurrencies can really reach the mainstream.
