Overview

Summary:

• The biggest hacks this year were mostly due to private key leakage.
• Security experts warned that such attacks would happen.
• Investors lost $2.3 billion to crypto theft in 2024.

It wasn’t a secret.

Blockchain security experts shouted it from rooftops last year: Infrastructure attacks targeting private keys and smart contract ownership would cause major damage to crypto projects in 2024.

Private keys control access to crypto wallets and should be stored securely. If not, hackers can use them to steal funds from a victim’s wallet.

Some companies didn’t heed those warnings and failed to secure their private keys, leaving the door open for North Korean cybercriminals to steal $1.34 billion in crypto, according to blockchain forensics company Chainalysis.

According to Luciano Ciattaglia, vice president of services at blockchain security auditor Hacken, companies affected by private key leakage made “avoidable mistakes.”

“Victims often used third-party private key management platforms that lacked proper security practices such as encryption or distributed storage,” Ciattaglia told DL News.

This year’s biggest hacks were all due to access control vulnerabilities including private key leakage.

In a year where investors lost $2.3 billion to crypto theft, private key leakage and other infrastructure attacks account for 81% of that total, according to blockchain security firm Cyvers.

Here are the five biggest crypto hacks of 2024.

DMM Bitcoin $308 million in May

Japanese crypto exchange DMM Bitcoin was the hardest hit this year.

The platform lost 4,502.9 Bitcoin worth $308 million in May.

Six months after the hack, the details are still unclear, but security researchers suspect North Korean hackers accessed the platform’s private keys.

They based their claim on the similarities between the laundering techniques used by the hackers to that of the dreaded North Korean cybercrime syndicate Lazarus Group.

DMM Bitcoin was unable to recover from the hack. The platform shuttered earlier this month and transferred its assets to trading platform SVI VC Trade.

PlayDapp: $290 million

PlayDapp, a South Korean blockchain gaming app, managed to avert disaster despite suffering a massive hack in February.

The saga began when a hacker hijacked control of PlayDapp’s smart contract for minting tokens and created 200 million PLA tokens.

At the time, the tokens were worth $26 million.

PlayDapp acted swiftly by contacting exchanges to freeze the tokens which prevented the attacker from cashing out.

Undaunted, the hacker minted 1.6 billion PLA tokens worth $264 million days later but they were unable to sell them.

PlayDapp has since migrated to a new token contract.

WazirX: $235 million

At first glance, WazirX was a secure platform.

India’s largest crypto exchange used a multisig wallet with four out of six signers, address whitelisting configured to an offsite interface, and signing keys domiciled in a hardware wallet.

Still, the platform lost almost half of its assets in one fell swoop.

Hackers breached one of the platform’s multisig wallets in July and stole $235 million in various cryptocurrencies including Ether and the Shiba Inu memecoin.

The hackers used complex attack vectors to trick WazirX wallet administrators into ceding access control over to the bad actors.

They used this access control to bypass other security measures and syphon funds from the platform’s wallet.

Police in India arrested a suspect allegedly connected to the hack in November.

Radiant Capital: $62.5 million

Cybercriminals attacked cross-chain DeFi lending protocol Radiant Capital twice this year, in January and October.

In January, an attacker manipulated the protocol’s smart contract to steal $4.5 million from versions of Radiant Capital deployed on Arbitrum and BNB Chain.

Then in October, the platform lost $58 million in an attack where hackers compromised the protocol developer’s private keys to steal funds.

That second attack has been linked to North Korean cybercriminals.

The attacker posed as a former team member and sent a malware-laced digital file to the project’s developer.

The malware gave the hackers access to Radiant Capital’s computers where private keys were stored.

Munchables $62.5 million

External actors aren’t the only threats to crypto projects; sometimes, the bad guys are within.

That was the case in March for Munchables, a non-fungible token project on the Blast blockchain.

The Munchables team had a bad actor in its midst.

The hacker, suspected to be from North Korea, used their access to introduce a vulnerability in the project’s smart contract.

That allowed the attacker to steal $62.5 million in Ether from the Munchables project in March.

However, the attacker returned the private keys needed to recover $60.5 million to the team.

Looking ahead

The uptick in private key leakage attacks this year contributed to investors suffering greater losses in 2024 than the previous year.

At $2.3 billion, crypto thefts in 2024 exceeded last year’s total by 40% — but is lower than the $3.8 billion record of 2022.

Crypto crime fighters say new and more dangerous attack vectors are looming.

Cyvers said in its report that that advances in quantum computing and artificial intelligence could drive more complex attacks next year.

Other security experts are also converging on that possibility.

“Next year, crypto investors might see more risks from AI-driven attacks, which are likely to make phishing scams more convincing and help attackers find vulnerabilities in smart contracts faster,” Ciattaglia said.

The Hacken executive said these sophisticated threats will require crypto developers to upgrade their operational security protocols.

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Bitcoin is increasingly being included in the portfolios of institutions and their clients. In this opinion piece, Jason Leibowitz, explores how the digital asset space can be tailored for institutions. He is Head of Private Wealth at Hashnote, a digital asset manager started by the founders of DRW.

For years, Bitcoin lingered at the fringes of institutional finance, viewed as an experimental asset marred by volatility and regulatory uncertainty. Despite its promise of decentralization and outsized returns, Bitcoin remained largely untouchable for banks, asset managers, and other stalwarts of traditional finance (TradFi). However, a tectonic shift is underway. As regulatory clarity emerges in the United States and institutional interest grows, Bitcoin is poised to redefine portfolio strategies. Yet, one critical question persists: How can Bitcoin move beyond speculative asset status and deliver real, risk-adjusted value to institutional portfolios?

This question lies at the heart of an innovation wave that is reshaping the digital asset landscape. Yield-generating Bitcoin strategies, long a focus of crypto-native platforms, are now being tailored for institutions. At Hashnote, an on-chain digital asset manager, we have seen firsthand the challenges and triumphs of building these strategies. The journey to institutional adoption is not without its hurdles, but the rewards—for both investors and the broader ecosystem—are transformative.

The Problem: Unlocking Productivity from a Volatile Asset

Bitcoin’s primary narrative has been that of digital gold—a store of value with long-term appreciation potential. While compelling, this narrative has limitations for institutional investors who require consistent income streams and clear regulatory guardrails. Institutions face a fundamental challenge: How do you turn a volatile, unyielding asset into a productive component of a balanced portfolio?

This challenge is compounded by legacy concerns. Custody solutions have historically been underdeveloped, and fears of counterparty risk or credit exposure have deterred adoption. Meanwhile, questions about regulatory compliance lingered, leaving institutions wary of wading into the digital asset space. These barriers have kept Bitcoin yields—and their potential—out of reach for many institutional players.

The Innovation: Building Yield Strategies for Institutions

At Hashnote, our mission has been to bridge this gap by developing Bitcoin yield strategies that address these challenges head-on. Two pioneering products exemplify our approach: Core Dual Staking and iBTC Wrapping. Each represents a unique, risk-mitigated way of earning yield on long spot Bitcoin positions without introducing new counterparty or credit risks.

Core Dual Staking emphasizes non-custodial staking, a principle that risk-conscious DeFi managers prioritize. Unlike traditional staking models, where assets may be at risk of slashing or centralized control, Core Dual Staking ensures that investors maintain control of their Bitcoin while eliminating slashing risk. This approach not only mitigates credit risk but aligns with the institutional demand for transparency and security.

iBTC Wrapping offers another innovative solution. This non-custodial Bitcoin wrapping product allows institutions to earn yield by integrating Bitcoin into decentralized finance (DeFi) ecosystems. Unlike traditional methods of wrapping Bitcoin, which often introduce counterparty risk, iBTC leverages smart contract functionality to maintain a one-to-one backing of Bitcoin without adding new layers of credit risk. For institutions, this means accessing DeFi yields with the confidence that their underlying assets remain in secure custody.

Both products exemplify how yield can be generated in a compliant and risk-managed manner. But where does this yield come from? The answer lies in the mechanics of staking and wrapping. Staking derives yield from participating in blockchain consensus mechanisms, earning rewards for validating transactions. Wrapping Bitcoin for DeFi applications creates opportunities to lend or provide liquidity, earning fees in return. These processes, while rooted in blockchain innovation, have been adapted to meet the stringent requirements of institutional finance.

The Solution: Regulatory Clarity Unlocks Potential

The pro-crypto administration set to take office in the United States marks a pivotal moment for institutional adoption. With a new head of the SEC who is reportedly supportive of digital assets and policymakers prioritizing regulatory clarity, the stage is set for a significant expansion of institutional engagement with Bitcoin. This clarity will address longstanding concerns around custody, liquidity, and compliance, empowering banks, registered investment advisors (RIAs), and other TradFi entities to incorporate Bitcoin into their offerings.

Regulatory clarity doesn’t just lower barriers; it creates opportunities. For the first time, institutions can envision a future where Bitcoin isn’t just an alternative asset but a core component of balanced portfolios. The ability to integrate Bitcoin yield strategies alongside equities, fixed income, and other traditional investments opens the door to new demand from institutional clients seeking diversification and long-term growth.

The Outcome: A New Era of Institutional Crypto Adoption

The convergence of product innovation and regulatory clarity is catalyzing a transformation in institutional finance. Bitcoin yield strategies, once seen as speculative, are now viewed as essential tools for generating risk-adjusted returns. For institutions, these strategies offer a way to justify Bitcoin allocations while addressing stakeholder concerns about volatility and risk.

We believe this moment is just the beginning. The ability to earn yield on Bitcoin without introducing new risks represents a paradigm shift, one that will redefine how institutions interact with digital assets. By aligning innovation with TradFi principles, we aim to make Bitcoin not just accessible but indispensable for institutional portfolios.

The journey from concept to reality is never linear, but it is always worth pursuing. As Bitcoin trades at historic highs and the market matures, institutions that embrace these innovations will find themselves at the forefront of a financial revolution. Yield-bearing strategies aren’t just a gateway to digital assets; they are the foundation of a new era in institutional finance.

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