Cryptocurrencies like Bitcoin and Ethereum continue to be prime targets for online criminals, who exploit vulnerabilities in major trading platforms and individual users’ digital wallets to carry out hefty thefts. The recent heist of US$1.5 billion worth of Ethereum from the Bybit platform, which the FBI has attributed to North Korean hackers, stands as the largest known theft in a growing list of such incidents.
Despite the transparency of blockchain technology, which publicly records transactions involving cryptocurrencies, theft remains a prevalent issue. A report from Chainalysis revealed that an estimated US$2.2 billion worth of assets was stolen in 2024, marking the fourth consecutive year that the global total exceeded US$1 billion. Notably, 60% of all crypto thefts by value in 2024 were linked to North Korea, with hackers from the country gaining renown for their sophisticated and persistent methods.
Cybercriminals often target cryptocurrency trading platforms and digital wallets, exploiting security vulnerabilities to access funds. While using major platforms involves trusting them with securing the cryptocurrency, hackers can bypass defenses through cyberattacks. The most common method of stealing crypto in 2024, according to Chainalysis, involved compromising owners’ private keys, accounting for nearly 43% of stolen funds that year. These key access codes can be obtained through social engineering tactics like phishing or hacking, allowing thieves to transfer assets out of wallets.
Blockchain technology, developed in the late 2000s, is lauded for its high level of security in recording ownership and transactions. Each transaction is recorded in a digital ledger, with copies dispersed across numerous participants’ computers, making it extremely challenging to tamper with the information. While attacks on the blockchain itself are possible, such as attempting to rewrite transactions, the difficulty level is notably high. In 2019, Gate.io fell victim to a blockchain attack, losing $200,000 in the process.
One of blockchain’s key virtues is traceability, as all transactions are publicly visible, theoretically enabling easy tracking of stolen assets. However, criminals can employ “mixers” to obscure the origin of funds, making tracing nearly impossible. These technologies blend cryptocurrency funds to conceal their source, impeding efforts to connect the assets back to their original source. Despite the challenges posed by such tactics, efforts to combat crypto theft continue to evolve in a bid to enhance security within the digital asset space.