Bridges are the infrastructure that allows users to exchange assets between different block chains, and it is the digital database that supports the major cryptocurrencies. When the bridge service exchanges one currency for another, it “encapsulates” the currency so that it works on the other blockchain.
Tom Robinson, chief scientist at blockchain analytics firm Elliptic, told CNN Business that the encapsulated currency doesn’t quite become another currency — “it just looks like it.” Instead, a “token” is issued to represent the new currency on a different blockchain. “I deposit my Bitcoin in the bridge. In exchange for doing this, I receive the Bitcoin token on the Ethereum blockchain, after which I can transfer the Bitcoin token, which is known as the encapsulated asset, through the Ethereum blockchain,” Robinson explains.
To support these encapsulated coins, the bridge services maintain large reserves of various coins. “You have to trust that the bridge actually has the assets that back those tokens,” Robinson said. “They have a huge amount of assets that support those tokens.”
These coin reserves are attracting the attention of hackers and turning blockchain bridges into prime targets for theft, according to Elliptic. “They are just huge attractions,” Robinson said. “They have massive amounts of crypto assets, so they are very clear targets.”
About $1.83 billion have been stolen from bridges so far, and most of that ($1.21 billion) happened just this year, according to Elliptic. Six major bridges have been robbed so far in 2022, including California-based Harmony, which lost $100 million in late June, and Axi Infinity’s Ronin Bridge, which was robbed of $625 million in March.
In the most recent example, hackers reportedly stole $190 million worth of cryptocurrency from crypto bridge provider Nomad, according to security and data analytics firm Peckshield. (Nomad has not confirmed the total amount lost.)
“We are working around the clock to address the situation and have notified law enforcement and retained leading companies in the field of blockchain intelligence and forensics,” Nomad chirp
Tuesday. “Our goal is to identify the accounts involved, track and recover funds.”
Nomad is working with chain analytics firm TRM to help track the funds in an effort to return stolen funds to users, according to A tweet posted by Nomad on Wednesday.
Bedouin first chirp
Late Monday, she addressed the incident and said she was “aware of impersonators pretending to be Nomad and providing false addresses to raise money.”
according to pick shield
The Nomad system was gradually depleted in batches, and the stolen coins included ether and some stablecoins pegged to the US dollar. A researcher at crypto investment firm Paradigm tweeted that the vulnerability was “one of the… Most Messy Hacks
Which Web3 has ever seen.
Just days before a file Incident, Nomad revealed several popular investors – including Coinbase Ventures, OpenSea and Crypto.com Capital – who participated in April A funding round of $22 million to “help develop a security-first cross-chain messaging solution.”
The increasing number of bridge attacks is adding to the security and confidence concerns in the crypto industry. Many of the biggest cryptocurrency thefts ever took place just in the past year, amid a surge in the price and use of cryptocurrencies. Cryptocurrency prices have since dropped dramatically but it is still a profitable target.
Cryptocurrency scams are also becoming common, with fraudsters stealing more than $1 billion from the beginning of 2021 through March of this year, according to a June report from the Federal Trade Commission.
“Some features of cryptocurrency may explain why it is a pet payment for scammers and negatives,” the Federal Trade Commission said in a statement at the time. “There is no bank or other entity to report suspicious transactions before they happen. Crypto transfers cannot be reversed. Once you run out of funds, you can kiss your crypto.”