Join NexChange - the professional
network for the financial services
industry - and receive a free one-
year subscription to Forbes
A New Report Says Two Groups of Hackers Have Stolen About $1B in Cryptocurrencies - So Far
FinTech, Blockchain, Financial Services
Well, here’s something to keep crypto investors up at night: A new report by Chainalysis has found that “two prominent, professional hacking groups” have been responsible for stealing about $1 billion in digital coins thus far, accounting for at least 60% of all publicly recorded hacks.
According to Chainalysis – a firm that tracks cryptocurrency transactions – these two hacking groups, which are referred to as Alpha and Beta in the report, are both likely still active. Alpha is “a giant, tightly controlled organization at least partly driven by non-monetary goals,” while Beta “seems to be a less organized and smaller organization absolutely focused on the money.”
Neither of these groups “appear to care very much about evading detection,” according to Chainalysis.
Per the report:
On average, the hacks we traced from the two prominent hacking groups stole $90 million per hack. The hackers typically move stolen funds through a complex array of wallets and exchanges in an attempt to disguise the funds’ criminal origins. The hackers then often observe a quiet period of 40 or more days in which they don’t move funds, waiting until interest in the theft has died down. Once they feel safe, they move quickly. At least 50% of the hacked funds are cashed out through some conversion service within 112 days.
The two hacking groups have different approaches to how they move stolen funds around, according to the report.
Alpha “immediately begins to shuffle them around rapidly” and “is skilled at moving money around, with an extremely high average number of transfers (up to 15,000 movements in one of the traced hacks).” Alpha also converts up to 75% of stolen assets to cash within 30 days, according to the report.
Meanwhile, Beta “steals funds and then sits on those funds for 6 to 18 months before they cash out.” Once the group cashes out, it will “hit one exchange, cashing out over 50% of funds within days, about $32 million in one instance.”
Chainalysis notes that the hacking of cryptocurrency exchanges “is far and away the most costly type of crypto crime.”
You can download a copy of the full report here.
Photo: Getty iStock