The rise of hacks and fraudulent coin scams

Cryptocurrency-related hacks and scams continue to surge, with billions in losses recorded. In 2024, the industry was estimated to have lost more than $3 billion to cybercrimes, up from $2.61 billion in 2023. This can be attributed to the increased valuation of cryptocurrencies, especially after Bitcoin hit $100,000 for the first time.

There is no sign of this trend slowing down even as the year 2025 continues. Major incidents in January have already caused millions in damages. Earlier this month, the cryptocurrency exchange Phemex blocked withdrawal options as cybersecurity firms informed the platform that $30 million had been cashed out. Other transfers also involved the movement of tokens across BNB Chain, Polygon, Arbitrum, and Base chains. 

2025 chaotic start

Earlier this month, the attackers seized control of Dawn Internet’s Twitter account, which is a project of the Decentralized Wireless Network. The stolen account was used for phishing messages with links to fake Telegram channels. These channels used bots like SafeguardsAuthenticationRobot to extract users’ sensitive cryptocurrency information. 

This month alone, the DeFi platform UniLend Finance also became a victim of a security breach in its redemption function, and $197,600 was stolen. The manipulators were able to use the fake share prices of collateral to access users’ funds without authorization. 

OpenSea email provider breach still has effects on the users to this date. This incident exposed 7 million email addresses which are currently being utilized by hackers for phishing attacks. It has been said that users are being lured to visit a particular site or download something or the other. 

More recently, the official X account of Litecoin cryptocurrency was hacked. The scammers leveraged the platform to push a fake token on the Solana blockchain. However, according to reports from the account, the breach was contained almost immediately. 

Litecoin's X account was briefly compromised today and posts that were not authorized were published. These were live only for a matter of seconds before being deleted. We're still investigating the issue, but immediately found a delegated account that was compromised and removed…

— Litecoin (@litecoin) January 11, 2025

Record-breaking crypto theft in 2024

A report by Chainalysis revealed that in 2024, hackers were able to steal $2.2 billion worth of cryptocurrency, a rise of 22% from the previous year’s $1.8 billion. DeFi protocols and centralized exchanges were the most affected.  While 2025 seems to be starting on the wrong foot, 2024 was a year that set troubling records. 

Here are some of the hacks that blew the industry off in 2024:

In May of 2024, hackers targeted Japan’s DMM Bitcoin exchange and made away with 4,500 BTC, which is worth over $300 million. Authorities believe that the North Korean actors hacked the key. The breach led to the parent company of DMM Bitcoin moving all the users to its competitor, SBI VC Trade.

The PlayDapp DeFi and gaming platform was hit by two attacks in February 2024, and the attackers made away with $290 million worth of PLA tokens. The attackers attacked a critical managerial problem but chose not to collect a $1 million bounty for returning the stolen funds. The stolen tokens have not yet been recovered.

Hi @playdapp_io, you may want to take a look.

New 200m $PLA tokens were just freshly minted. It seems to be a private key leak and the new minter was just added in the following tx: https://t.co/tyxDksNwSt pic.twitter.com/SkjZsTjtdQ

— PeckShield Inc. (@peckshield) February 9, 2024

In June 2024, India’s WazirX exchange was hacked, and it was one of the biggest hacks of an exchange ever. It was reported that hackers managed to breach its multi-signature wallet, which influenced the authorized signatories to approve the fraudulent transactions. Reports indicate the Lazarus Group’s involvement. 

Ripple co-founder Chris Larsen was one of the victims of hacking in January 2024 where he lost 213 million XRP which is equivalent to $112.5 million. The money was laundered through several exchanges and therefore it has been difficult to track. Unfortunately, the assets are still untraceable.

Cross-chain DeFi project Orbit Chain kickstarted 2024 with an $80 million hack. The hackers were able to manipulate the flaws within the organization’s smart contracts and launder the money through Tornado Cash. 

What drives crypto hacks?

Looking at these hacks and the money lost, one might ask why the hackers do this.

The primary motivation for crypto hacking is to make a profit from stealing cryptocurrencies according to a report by Forbes. Cryptocurrencies are easier for hackers to use due to the fact that they are decentralized and the owners of the coins are not easily identifiable. In contrast to conventional financial systems, stolen digital currencies can be easily cleaned using mixers and privacy coins.

Fast innovation within the industry means that many projects are left vulnerable to hacks and fraud. It is common for many projects to focus on the release of their platforms without even performing a proper security check. Such a rush results in smart contract vulnerabilities, multi-signature wallets’ vulnerabilities, and exchange infrastructure vulnerabilities. Cross-chain bridges have been the most common targets as they possess intricate structures and hold large amounts of assets.

According to Chainalysis, state-sponsored groups like North Korea’s Lazarus Group are now using crypto hacks more often. These organizations use cryptocurrency to carry out their activities despite the sanctions imposed on them by other countries. Similarly, other cybercriminals are also involved in running complex ransomware attacks on individual investors and other small platforms.

Arrests and recoveries

Even as the number of attacks increases, arrests are still a rare occurrence. In 2024, police officers arrested less than 20 people for being involved in the biggest crypto hacks. Most of these arrests were made possible through international cooperation between law enforcement agencies such as Interpol and Europol, as well as blockchain analytic companies.

Similarly, it is equally hard to recover stolen funds. Out of the $4.5 billion reported to have been lost in 2024, only $1.35 billion was restored. Some of it can be attributed to the fact that blockchain is transparent and it becomes easier for firms to trace stolen funds. But more often, hackers use mixing services to hide the source of the funds, thereby making it almost impossible to fully restore the lost funds.

Sometimes hackers have willingly refunded the money, a surprise, right? An interesting case occurred in 2024 when a group of hackers who identified themselves as ‘ethical hackers’ decided to steal $200 million from a DeFi platform and then return. They stated that they did so to demonstrate how vulnerable the platform was. Cryptopolitan recently reported that WazirX has locked up $3 million so as to recover the stolen funds. 

Additionally, on January 14, Japan, South Korea, and the United States released a trilateral statement on the rising threats from cybercriminals affiliated with North Korea. As stated in the report, several measures have been adopted in the US to improve the fight against illicit crypto activities. Some of the initiatives include the Illicit Virtual Asset Notification (IVAN), the Cryptoasset and Blockchain Information Sharing and Analysis Center (Crypto-ISAC), and the Security Alliance (SEAL).

Both South Korea and Japan have also increased their efforts in enhancing regional cooperation. The Japan Virtual and Crypto Assets Exchange Association (JVCEA) and the South Korean government have put in place self-inspection mechanisms and conducted symposiums to enhance cooperation between the public and private sectors.