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In the same time period last year, hackers stole $1.2 billion worth of money.
DeFi applications, many of which run on the Ethereum blockchain, are financial platforms that allow crypto-based lending outside of traditional banks.
Chainalysis said that the trend is not likely to change soon, since the cross-chain bridge Nomad was hacked for $190 million and several Solana wallets were hacked for $5 million in the first week of August.
“DeFi protocols are uniquely vulnerable to hacking, as their open source code can be studied ad nauseum by cybercriminals looking for exploits and it’s possible that protocols’ incentives to reach the market and grow quickly lead to lapses in security best practices,” Chainalysis said in the blog.
The US firm wrote that a lot of the money stolen from DeFi protocols can be blamed on "bad actors" with ties to North Korea, especially elite hacking groups like Lazarus Group.
Chainalysis thinks that groups with ties to North Korea have stolen about $1 billion worth of cryptocurrency from DeFi protocols so far this year.
Through July, the blockchain intelligence firm saw a sharp 65% drop in crypto scams, which was in line with the drop in the prices of digital assets. In the year up to July, scams brought in a total of $1.6 billion. This is 65% less than the $4.46 billion that scams brought in during the same time last year.
Scammers might pretend to be real businesses and sell fake crypto coins or tokens.
“Scams are down primarily because of the crypto downturn, but also because of the many law enforcement wins taken against scammers and the product solutions that exchanges can use to fight scamming,” said Kim Grauer, Chainalysis’ director of research, in an email to Reuters.
According to CoinGecko, the value of the crypto market as of the end of Thursday was $1.1 trillion. This is down more than 50% from the beginning of the year, when it was around $2.35 trillion. Bitcoin's price has dropped by about 48% so far this year, and it has been stuck between $20,000 and $24,000 for the last few months.
Chainalysis says that since January 2022, the money made from scams has gone down at the same rate as the price of bitcoin. Not only did the money made from scams go down, but the total number of transfers to scams was the lowest it had been in the past four years.
“Those numbers suggest that fewer people than ever are falling for cryptocurrency scams,” Chainalysis said in the report.
“One reason for this could be that with asset prices falling, cryptocurrency scams — which typically present themselves as passive crypto investing opportunities with enormous promised returns — are less enticing to potential victims.”
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