Tracking Stolen Crypto – How Blockchain Analysis Can Help Recover Funds

Amidst the rapid evolution of decentralized finance (DeFi) and the broader Web3 landscape, security is paramount. Understanding attack patterns makes it important for risk assessment and reliability assessment. More than $990 million was lost or stolen in 2023 alone, according to Cointelegraph's Crypto Hacks database.

This growing need for security has led to the creation of Web3's diverse ecosystem of security expertise, from decentralized identity solutions to smart contract auditors, to ensure the security of this dynamic digital space.

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The government-linked Lazarus group from North Korea is a continuing threat. In the year Lazarus was responsible for at least $291 million in losses by 2023. Although in the third quarter of the year, Lazarus became active and was responsible for the attack on CoinEx, which caused a loss of more than 55 million dollars, which is a reminder of cyber security. Tests.

Strengthening crypto security with blockchain analysis

In addition, even companies sometimes struggle to combat potential hacks and exploits. Accordingly, solo clip enthusiasts need analysis and research skills to protect funds. Blockchain analysis is the investigative process of examining blockchain transactions to track illegal activities and recover stolen assets. Here's how it works:

Transaction tracing: Blockchain analysts closely monitor blockchain transactions involving stolen cryptocurrency.Address clustering: Analysts group related addresses to identify stolen money flows. This collection helps understand how funds move between wallets. Behavioral Analysis: By studying transaction patterns, analysts can identify unusual or suspicious behaviors that may indicate hacking or theft. Pattern Detection: Analysts use historical data and known attack patterns to identify emerging threats. Early detection and mitigation. Regulatory vigilance: Governments around the world are pushing for stricter anti-money laundering (AML) and know-your-customer (KYC) regulations in crypto. Collaboration: Blockchain analysis often involves collaboration with law enforcement agencies, exchanges, and other stakeholders. To stop or recover stolen property.

Blockchain analysis is one of the tools at an investigator's disposal when investigating a cryptocurrency hack. Open source intelligence (OSINT) is another critical component. Investigators use OSINT to gather information about individuals or entities involved in the hacking. This may involve using tools such as Etherscan, Nansen, Tenderly, Ethective or Breadcrumbs to better understand the situation.

By combining blockchain analytics with OSINT, investigators can build an overview of the hack, identify criminals, and recover stolen assets more efficiently.

In a significant case, the criminal exploitation of Curve Finance, resulted in more than 61 million in crypto losses on July, Alchemix Finance and Curve Finance returned around $8.9 million cryptocurrency. Interestingly, the attacker's goal is not to evade capture, but to preserve the integrity of the exploited protocols. The attack, which took advantage of a regression bug, affected a variety of pools, including Alchemix Finance's alETH-ETH, JPEG'd pETH-ETH, and Metronome sETH-ETH pools. With the recovered funds representing about 15% of the total drain, this incident illustrates the complex dynamics of ethics and incentives in the crypto space following security breaches.

On-chain data is an invaluable investigative tool unique to the world of blockchain and crypto assets. Thanks to its distributed ledger technology, it gives all Web3 enthusiasts a unique window into asset activity, transaction tracking, and powerful analytics capabilities. Take advantage of these opportunities by exploring Cointelegraph Research's most important crypto hacks database to gain comprehensive insights into the latest security issues and emergencies. Learn how this powerful tool empowers you to protect your crypto assets and stay ahead of potential risks.

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