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Taken on May 23, 2022, this illustration shows the cryptocurrencies Bitcoin, Ethereum and Dash jumping into the water. REUTERS/Dado Ruvic/Illustration
Aug. 9 (Reuters) – Another day, another hack – and another blockchain bridge burned.
The seventh hack took place in 2022 when thieves stole an estimated $190 million from US cryptocurrency company Nomad last week. This was aimed at the increasingly important cogs in crypto machines. It is the blockchain bridge a string of code that helps move crypto coins between different applications.read more
According to data from London-based blockchain analytics firm Elliptic, hackers have stolen about $1.2 billion worth of cryptocurrency from the bridge so far this year, already more than double last year’s total.
This is a war in which no cybersecurity company or project can win, said Ronghui Hu, a computer science professor at Columbia University in New York and co-founder of cybersecurity firm CertiK. increase.
There are so many projects that need to be protected. They (hackers) can look at one project and if there are no bugs, they can move on to the next until they find one weak spot.
Most digital tokens today run on their own proprietary blockchains. It is essentially a public digital ledger that records cryptographic transactions. This risks siloing projects using these coins and making them less likely to be widely used.
Blockchain Bridge aims to tear down these walls. The backer says it will play a fundamental role in “Web3.” This is the much-touted vision of a digital future in which cryptocurrencies are intertwined with online life and commerce.
But bridges can be the weakest link.
The Nomad hack was the eighth largest cryptocurrency theft on record. Other thefts from Bridge this year include his $615 million heist at Ronin (used in a popular online game) and $320 million at Wormhole used in a so-called decentralized financial application. including the theft of $10,000.read more
Blockchain bridges are the most fertile ground for new vulnerabilities, said Steve Bassi, co-founder and CEO of malware detector PolySwarm.
Companies such as Nomad, which creates blockchain bridge software, are gaining traction.
Just five days before being hacked, San Francisco-based Nomad announced that it had raised $22.4 million from investors including leading exchange Coinbase Global. (COIN.O)Nomad CEO and co-founder Pranay Mohan calls its security model the “gold standard.”
Nomad did not respond to a request for comment.
It says it is working with law enforcement and blockchain analytics firms to track stolen funds. Late last week, we announced a bounty of up to 10% for the return of funds hacked from the bridge. On Saturday, he announced that he had recovered more than $32 million in hacked funds so far.
The most important thing in crypto is the community and our biggest goal is to recover the funds of our bridged users, Mohan said. We treat parties who do so as white hats.We do not prosecute white hats,” he said, referring to so-called ethical hackers.
Several cybersecurity and blockchain experts told Reuters that the complexity of bridges means they could become Achilles heels for projects and applications that use them.
The reason hackers have targeted these cross-chain bridges recently is because of the very sophisticated technology involved in creating these kinds of services, said Ganesh Swami, CEO of Vancouver-based blockchain data company Covalent. said Mr. Bridge when hacked.
For example, some bridges create versions of crypto coins that make them compatible with different blockchains and keep the original coin in reserve. Others rely on smart contracts, complex contracts that automatically execute transactions.
The code associated with all of this can contain bugs and other flaws, leaving the door ajar for hackers.
So how best to deal with the problem?
Some experts say smart contract audits can help prevent cyber theft and bug bounty programs that encourage open source reviews of smart contract code.
Others want to reduce the centralization of bridge control by individual companies. This could make the code more resilient and transparent, they say.
Victor Young, founder and chief architect of US-based blockchain firm Analog, said, Cross-chain bridges often use centralized infrastructure, most of which lock assets, making them a threat to hackers. An attractive target.
Reported by Tom Wilson, London and Medha Singh, Bangalore. Edited by Pravin Char
Our criteria: Thomson Reuters Trust Principles.
Opinions expressed are those of the author. They do not reflect Reuters News’ commitment to integrity, independence and freedom from bias under its Trust Principles.
