Blockchain analysis firm Chainalysis has disclosed that just two groups benefited from the majority of cryptocurrency hacks that have occurred to date. Per The Wall Street Journal, the two hacking groups could have obtained as much as $1 billion in cryptocurrencies. Since bitcoin came into…
Blockchain analysis firm Chainalysis has disclosed that just two groups benefited from the majority of cryptocurrency hacks that have occurred to date.
Per The Wall Street Journal, the two hacking groups could have obtained as much as $1 billion in cryptocurrencies. Since bitcoin came into being, over $1.7 billion worth of cryptocurrencies are estimated to have been stolen.
According to Chainalysis’ chief economist, Philip Gradwell, the two hacking groups are most likely still active. While disclosing that tracking the funds that were stolen in publicly reported hacks took three months, Chainalysis pointed out that their analysis might be incorrect. The blockchain analysis platform could also not identify the two hacking groups.
The report by Chainalysis has shattered the perception that most of the cryptocurrency hackings are committed by lone wolves. According to Chainalysis one of the hacking groups, which it has named Alpha, is tightly controlled.
To some extent, this group has some non-financial motivations for its actions. The other group named Beta is smaller but more driven by financial considerations.
Per Chainalysis, the two groups conceal their tracks by using a large network of wallets. On average the stolen cryptocurrencies were moved around 5,000 times prior to being exchanged for fiat currencies.
After mixing and shuffling, the cryptocurrencies were then converted to fiat currencies using online exchanges and through peer-to-peer transactions.
To cash out even regulated exchanges employing strict anti-money laundering processes are sometimes used. The hackers do this knowing that after all the shuffling, regulated exchanges will find it extremely difficult to detect stolen funds.
The two groups have different ways of handling stolen cryptocurrencies. While Alpha starts shuffling the stolen funds immediately, Beta is more patient and may sometimes wait until one and a half years.
Last year more than $0.7 billion worth of cryptocurrencies were lost through hackings of exchanges. This was almost a three-fold increase as the year prior, approximately $266 million was lost via security breaches.
Among the exchanges that fell victim to cryptocurrency thefts in 2018 was Coincheck which lost approximately $530 million. The other significant heist occurred at South Korea’s Coinrail cryptocurrency exchange where $40 million was stolen.
This year one of the notable cryptocurrency exchanges to be hacked is New Zealand’s Cryptopia which has lost approximately $16 million.
As previously reported, this heist did not involve exploiting a vulnerability on the exchange but rather the users’ digital wallets. In total 76,000 digital wallets were infiltrated. And unlike other attacks, the hackers stole the funds over a period of five days.
Last modified: May 20, 2020 12:52 PM UTC