October 2022 is already the worst month for crypto hacking — and we’re not even halfway through it

The crypto market suffered 11 hacker attacks worth $718M in the 12 days of October. A kind of anti-record was caught by Chainalysis specialists, publishing a report on Twitter. 

Is this just the beginning?

Overall, it may turn out that 2022 will be the year with the highest number of hacks, and October will be in first place for the total number of attacks. This is possible because there is still more than a month to go. On October 12 only, DeFi experts documented four attacks in their logs.

 

Experts say that at this rate, 2022 will surpass 2021 as the biggest year for hacking in recorded history. According to Chainalysis, hackers made more than $3B last year with 125 hacks.

 

Which networks suffered hacks in October?

As we wrote above, in just about two weeks in October, hackers committed 11 hacks. Here are some of them: 

• Quantum-resistant blockchain QANplatform suffers bridge hack for over $1M. The price of the native token QANX crashes by 94%.
• Crypto market maker Wintermute hacked for $160M. The company’s CEO reported that the money was related to its DeFi operations.
• A cross-chain decentralized swap platform, Transit Swap lost $21M. A hacker exploited an internal bug on a swap contract.
• Hackers stole $100M from crypto Solana-based DeFi finance platform Mango.

Sam Bankman-Fried, head of the FTX crypto exchange, commented on the hacking of the latter. He said that the incident happened not because of the incorrect operation of price oracles Third-party services that provide smart contracts with external information and serve as bridges between blockchains and the outside world but because of the lack of a risk assessment system. 

The main problem is…

Also, the Chainalysis report states that bridges remain the most severe problem in crypto. They are mentioned in 82% of all attacks in October, with three bridge breaches this month and ~$600M stolen, and the total number of bridge hacks in 2022 is more than 50%. 

In 2019, most hacks targeted centralized exchanges, and prioritizing security went a long way. Now, a vast majority of targets are DeFi protocols. 

As a reminder, a bridge in the blockchain is a protocol that connects two blockchains and allows communication between them. For example, if a user has BTC but wants to work in the ETH network, he can transfer his assets using a bridge without selling his coins. This technology is the key to achieving interoperability in the blockchain. 

The most notorious bridge hacks in 2022: 

• Bridge Wormhole on the Solana network. Hackers managed to withdraw 120,000 wETH, which is ~$150M at current exchange rates.
• Harmony Horizon Bridge Hack. An intruder stole altcoins and sent them to an ETH wallet. The damage was $100M, and the token’s value dropped by 95%.
• A hack on the Ronin network, operated by the bridge of the same name. Hackers stole 173,600 ETH (~$216M) and $25.5M in dollar coins. Considered to be the largest hack in cryptocurrency history.
• Nomad blockchain bridge hack. Attackers withdrew about $152M, distributing the stolen funds to 41 addresses.

Overall, Binance and Solana were the leading networks in terms of hacking activity in October.