With a staggering $1 billion in crypto gone missing in 2023, how is on-chain data and blockchain analysis painting a nuanced picture of hackers’ motives while helping to recover stolen riches? Get the inside scoop on how these digital tools keep you one step ahead in the crypto game.

The world of decentralised finance (DeFi) and Web3 is like the Wild West of the internet—fast, thrilling, and downright risky. Just this year, a jaw-dropping $1 billion vanished into thin air or landed in the wrong hands. Yep, you read that right, according to the DefiLlama.

Source: DefiLlama

But don’t worry, it’s not the end of the world. A new league of digital guardians is rising to the occasion. From folks who specialise in decentralised IDs to the Sherlock Holmes of smart contract audits, there’s a whole squad working around the clock to keep this virtual playground safe.

Oh, and let’s not forget our notorious villains. Meet the Lazarus Group, North Korea’s own state-backed hacking squad. These guys have siphoned off a staggering $291 million this year alone. They even pulled off a Hollywood-style heist on CoinEx, swiping more than $55 million. It’s like a cyber-thriller unfolding in real-time, reminding us that this new frontier is exciting but still has its fair share of bad actors.

According to a 2023 Chainalysis report, illicit crypto inflows are down 65% compared to where they were at the same time in 2022. 

What’ crypto and blockchain security?

Let’s spice things up a bit! Imagine your digital wallet gets hacked, and your crypto goes poof—vanished! What do you do? Enter blockchain analysis, the detective work for the crypto world. Even big companies sometimes drop the ball when it comes to dodging digital theft, so knowing a thing or two about this can be your own superhero cape.

So, what is blockchain analysis? It’s like being a digital Sherlock Holmes, digging through transaction histories to find where the stolen crypto went. Here’s a quick rundown:

  • Transaction tracing: Think of this as following a breadcrumb trail. Analysts keep an eye on every movement of the stolen cryptocurrency.
  • Address clustering: This is like connecting the dots. They group together related wallet addresses to see where the stolen money might have been moved.
  • Behavioural analysis: Ever notice someone acting sketchy? It’s the same here. By looking at transaction patterns, analysts can spot anything that seems off and might point to theft.
  • Pattern recognition: This is about learning from the past. Analysts use old data and known tricks hackers have used before to catch new threats faster.
  • Regulatory vigilance: The government is stepping in, too. They’re making rules stricter to make sure people can’t use crypto for shady stuff like money laundering.
  • Team effort. It’s not a one-man show. Often, these analysts team up with the police, crypto exchanges, and other big players to either freeze the stolen money or get it back.

Everything you need to know is on the blockchain

When a cryptocurrency hack goes down, it’s not just a “whodunit,” but also a “how-can-we-fix-it,” and our digital Sherlock Holmes has a trusty toolkit for just that. Enter blockchain analysis, the magnifying glass for all those cryptic crypto transactions.

But wait, there’s another star in this crime-busting duo—Open-source intelligence, or OSINT for short. Imagine it as the Watson to blockchain analysis’s Sherlock. OSINT dives deep into the digital world, sifting through clues using nifty tools like Etherscan, Nansen, Tenderly, Ethective, and Breadcrumbs. It’s like the Swiss Army knife of cyber-sleuthing.

Mash up the keen eye of blockchain analysis with the broad reach of OSINT, and what do you get? A turbocharged, crime-solving engine that not only pins down the bad guys but also has a good shot at getting back that stolen loot.

So, the next time you hear about a crypto heist, remember: our digital detectives are on the case, armed with blockchain analysis and OSINT, making the virtual world a little safer, one solved case at a time.

Tracking down the crypto hacker

Get this—sometimes crypto villains have a change of heart! Take the Curve Finance exploit, for example, where the baddie walked away with $61 million in digital dough. 

Plot twist: the hacker returned nearly $9 million not because they were scared of getting caught, but because they wanted to keep the systems they hacked into running smoothly. Yeah, it sounds like something out of a comic book, but this is real life, and it shows how complex the ethics of the crypto world can be.

What helped crack the case?

It’s all thanks to the digital fingerprints left on the blockchain. 

On-chain data is like the DNA test of the crypto world. It gives us a crystal-clear view of who did what, when, and where. It’s like a treasure map that helps you understand how to keep your assets safe and sound while steering clear of the digital booby traps.

So whether you’re a casual enthusiast or a crypto guru, this ever-evolving landscape is full of opportunities and threats. Just remember, knowing is half the battle, and in this high-stakes game, knowledge can be your superpower.