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October ‘the biggest month for hacks’ – and it’s not even finished yet: Chainalysis

By Darius McQuaid

11:18, 13 October 2022

Computer hacker holding a laptop
Chainalysis has noted a shift from hacks on centralised exchanges to decentralised exchanges – Photo: Getty Images

Blockchain data platform Chainalysis has called October 2022 the “biggest month in the biggest year for hacking” – despite only being halfway through the month.

In a Twitter post, the blockchain data platform said that $718m (£640m) has been stolen so far during October from decentralised finance (DeFi) protocols across 11 different hacks.

The firm also believes that 2022 will surpass 2021 as the biggest year for crypto hacking. Thus far this year has seen $3bn (£2.6bn) stolen across 125 hacks, while 2021 saw just over $3bn hacked.

Chainalysis also noted a shift from hacks on centralised exchanges to decentralised exchanges. In 2019 “most hacks targeted central exchanges” while the “vast majority” targeted are now DeFi protocols.

The blockchain data platform noted that cross-chain bridges “remain a major target for hackers”. Three bridges were breached in October with almost $6m (£5.3m) stolen.

However, on the same day as Chainalysis released this information, bitgert (BRISE) revealed that a hacker attempted to expose “an apparent vulnerability in the back end of its bridge”.

Bitgert managed to respond to this immediately and “damage has been kept to an absolute minimum”. The crypto said “funds are safe, the breach has been terminated”.      

MNGO token falls after $100m Mango Market exploit

On 11 October Mango Markets, a lending protocol on the Solana (SOL) blockchain, was the victim of a $100m (£89m) hack that has seen its MNGO token drop. This hack was included in the Chainalysis statistics.  

XRP/USD

0.60 Price
-4.210% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.01168

DOGE/USD

0.12 Price
-6.920% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 0.0012872

SOL/USD

169.36 Price
-7.160% 1D Chg, %
Long position overnight fee -0.0753%
Short position overnight fee 0.0069%
Overnight fee time 21:00 (UTC)
Spread 2.2652

BTC/USD

64,984.20 Price
-2.080% 1D Chg, %
Long position overnight fee -0.0616%
Short position overnight fee 0.0137%
Overnight fee time 21:00 (UTC)
Spread 106.00

According to CoinMarketCap, Mango Markets token, MNGO is down by 18% to $0.02271.

Two accounts funded with USD Coin (USDC) took out an outsized position in the MNGO and perpetual protocol (PERP) pairing. This manipulated the protocol’s oracles, allowing the attackers to max out their accounts and walk away with a net value of $100m.

Recently, the hacker posted a proposal on Mango Markets’ governance platform saying the funds would be returned if the protocol uses $70m (£62m) of the stolen cash to pay off bad debt.

This refers to a Solana investor who had to be bailed out after they accumulated more than $200m (£178m) in debt across multiple lending platforms. It was feared that if the investor’s position were liquidated it would send shockwaves through the market.

Thus far, more than 33 million have voted in favour of the hacker’s proposal, with just over 21,000 voting ‘no’. A total of 66 million votes are needed to pass the proposal.

Mango Markets had previously tweeted its intention to communicate with the hackers and find an amicable solution, and provided an email for the hacker to send to and discuss a bug bounty. 

SOL to USD

Markets in this article

PERP/USD
PERP/USD
0.6124 USD
-0.0504 -7.830%
SOL/USD
Solana / USD
169.3613 USD
-12.8937 -7.160%

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The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
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