Have Crypto Exploits In 2022 Taught Us Important Lessons For 2023?

  • Crypto has experienced an alarming influx of assaults and exploits during the last 12 months. This is an urgent dispute that requires a special address because there are a lot of such matters to keep a watch over.
  • Before this, they were praised for their high levels of security, flexibility and transparency. 
  • Cryptocurrencies and the platforms that underpin them are increasing their focus on sophisticated cyberheists.

Looking back to 2022, a year marked by significant crypto vulnerabilities, one can draw useful lessons about how these heists were planned and how to improve security in the future. 

Unprecedented crypto attacks have occurred during the past year, including the compromise of the Ronin Network and the demise of the centralized exchange FTX, among others. This analysis aims to go into each of these situations, illuminating their characteristics and the repercussions they have on the cryptographic community.

The Onslaught Of Assaults

2022 is on pace to be the worst year ever for money lost to hackers and exploits, according to Chainalysis. As of last count, $3 Billion had been taken. The Ronin hack is especially noteworthy. In March, the Lazarus Group, which has ties to North Korea, took over $620 Million worth of ETH and USDC from the Ronin Network, a sidechain created for the well-known Web3 game Axie Infinity.

About $30 Million of the stolen monies have been recovered by law enforcement, and Binance has been able to freeze an additional $5.8 Million, but the majority of the assets are still in the hands of the hackers.

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Additionally, money lost in the February attack on the Wormhole Bridge has not yet been replaced. Although not the first to be attacked, this bridge that links the blockchain networks of Ethereum, Solana, Avalanche, and others may have been the most notable. Without providing any collateral, an attacker managed to create 120,000 wrapped ethers, or wETH. They then exchanged the free wETH for conventional ETH and SOL, making $320 Million for themselves. Although this money was not retrieved, Jump Trading intervened to provide Wormhole with the 120,000 ETH required to restart the bridge.

Procedure To Put A Step Forward for Crypto

The good news is that things don’t have to remain this bad. If crypto platforms and protocols are willing to increase their defensive measures, one will witness significantly fewer attacks in 2023 and beyond, or at least their effects will be lessened. This can take many different forms, but they all entail better monitoring and systems that are set up ahead of time to react when an event does happen.

All smart contract codes must be meticulously audited by reliable third-party sources as the first line of defense. To fully reveal any issues discovered and the steps taken to address them, the results of these audits should also be openly shared with the community.

Audits are necessary, but if there were enough of them, there wouldn’t be as many exploits in the crypto realm. Even extensively tested and audited code must be delivered in a way that enables teams to protect against potential risk factors. Users won’t be able to have confidence that their money is secure without strong security and operational monitoring that tracks the status of privileged accounts as well as wider interrelationships between system components and blockchain states.

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Decentralized services require a more real-time, proactive approach to security because of this. Systems that actively track transactions on a specific platform and can identify unusual or suspicious conduct, such as abrupt increases in consumption, pricing fluctuations, interactions with blacklisted accounts, and governance suggestions made using short-term loans, are all prohibited.

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