2022 was the biggest year ever for cryptocurrency hacking, with more than £3.2bn stolen worldwide, according to new research.
October alone saw £629m taken – the most recorded in a single month.
It helped the overall year dwarf 2021’s previous high of £2.7bn, although the total number of hacks fell slightly.
The annual report by Chainalysis, a blockchain analysis firm which sees its data used by governments, banks, and businesses worldwide, says the activity was largely driven by hackers based in North Korea.
In 2022, Chainalysis says hackers associated with Pyongyang – notably criminal syndicate Lazarus Group – stole an estimated £1.4bn in cryptocurrency assets, breaking their own record.
The amount of crypto thought to have been stolen hugely outweighs North Korea’s total annual exports, which latest figures from the Observatory of Economic Complexity put at £115m for 2020.
“It isn’t a stretch to say that cryptocurrency hacking is a sizable chunk of the nation’s economy,” said Chainalysis.
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What is the main aim of cryptocurrency?
Where was the money stolen from?
The biggest victims of crypto hacks in 2022 were within decentralised finance protocols, which is essentially when investors cut out the middle man – like a bank or exchange – and transfer funds directly between digital wallets.
But according to Chainalysis, these so-called DeFi protocols made up 82.1% of crypto stolen by hackers in 2022, totalling more than £2.5bn.
David Schwed, of blockchain security company Halborn, said DeFi developers should not be afraid of looking to traditional centralised systems for inspiration in making themselves safer to use.
“You don’t need to move as slow as a bank, but you can borrow from what banks do,” he said.
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‘Regulate crypto before systemic problem’
UK’s ‘encouraging’ regulation plans
The report comes as the UK government unveils proposals to regulate crypto, as the market seeks to regain the confidence of investors spooked by an exceptionally volatile period.
Under the plans, which would bring the industry more in line with traditional financial systems, crypto platforms would become responsible for defining the demands that a currency must meet before being admitted for trading.
Exchanges will also be held accountable for safely facilitating transactions and keeping customer assets safe.
Jordan Wain, UK public policy lead at Chainalysis, told Sky News the regulation was welcome.
“It is encouraging to see the prominent thread of consumer protection running through these plans, which evidence a clear intent to tackle potentially abusive behaviours,” he said.
But he warned that tougher rules must not harm the industry’s “potential for innovation and growth”.
The proposals, which come less than a year after Rishi Sunak said he wanted the UK to become a “global crypto asset hub”, will go out for consultation before coming into force.
Emergency responders are searching for bodies inside stranded cars and buildings following deadly flash floods in Spain that have killed at least 158 people.
Scenes of destruction have been left in the wake of the powerful floodwaters which hit the east of the country late on Tuesday and early Wednesday, marking Spain‘s worst natural disaster this century.
Cars have been piled high on top of each other, homes and businesses have been swept away, trees have been uprooted, and roads and bridges have been left unrecognisable.
At least 92 people have died in the worst-hit region of Valencia, while deaths were also reported in Castilla La Mancha and southern Andalusia.
An unknown number of people remain missing.
“Unfortunately, there are dead people inside some vehicles,” Spain’s transport minister Oscar Puente said.
In the Valencian district of La Torre, nine dead bodies were discovered inside a garage – with a local police officer among the victims.
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Man pulled from deadly floods
Luis Sanchez, a welder, said he saved several people from floodwaters rushing through the V-31 motorway south of Valencia city.
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“I saw bodies floating past. I called out but nothing,” Mr Sanchez said.
“The firefighters took the elderly first, when they could get in. I am from nearby so I tried to help and rescue people. People were crying all over, they were trapped.”
Satellite images from NASA show how severe flooding has impacted Valencia and its surrounding towns.
The images, captured on 30 October, show large areas to the south of the city covered in floodwater.
The Turia river, which runs through the city, can be seen at a much higher level.
The Pobles del Sud, a large lake nearby, overflowed. Much of the area surrounding the lake was covered in floodwater.
The worst of the destruction was concentrated in Paiporta, a municipality next to Valencia city, where 62 people have been reported dead.
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Spanish town ‘worst-hit’ by floods
Mayor Maribel Albalat told national broadcaster RTVE: “We found a lot of elderly people in the town centre. There were also a lot of people who came to get their cars out of their garages… it was a real trap.”
What has caused the devastation?
The flooding events in Spain have been hard to witness. But the rainfall there could never have been anything but devastating.
Chiva, located just to the west of Valencia, received 491mm of rain in an eight-hour window.
Some 100-200mm fell in surrounding areas with the accumulation of running water producing apocalyptic scenes.
In addition there have been over 20,000 lightning strikes.
Whilst the rainfall totals are astounding in themselves, this part of the world is simply not accustomed to huge quantities of water falling from the sky.
In an average year, Spain would expect somewhere between 50 and 100 mm of rain throughout the entire month of October but Valencia and Andalusia would expect far less – just 60–70mm.
So how did this happen? It’s attributable to a DANA, a “depresion aislada en niveles altos” or a “cut-off low”.
This is a low pressure system which becomes slow moving or stationary, blocked by high pressure elsewhere, which can only keep shedding its rain over the same area for long periods of time.
These systems are not that unusual. They occur when cool air from the north is drawn across the Mediterranean in late summer and autumn when the waters are war. The temperature differential enhances storms and rainfall totals.
But whilst not uncommon, this one was certainly extreme.
And it hasn’t gone yet. This same system has continued to bring further heavy rain and thunderstorms today, but it has now moved a little further north and east, heading toward the French border and currently remaining to the west of Barcelona.
The rain and thunderstorms are likely to continue for a few days yet with the Tarragona and Castellon regions still under an amber warning while a yellow warning remains in force for both eastern and western Spain.
Spanish Prime Minister Pedro Sanchez said on Thursday morning that Valencia had been declared a disaster zone and that the priority was to find victims and missing people.
He also urged those affected to stay at home as more torrential rain was forecast.
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“The most important thing is that I know Spanish people are aware that this phenomenon has not finished,” he said.
Sky News’ Europe correspondent Adam Parsons, reporting from Valencia, said the devastation suffered in the region is “enormous”.
“What we’re witnessing now are the locals here who are waking up and seeing what’s happened to their town and what has happened is something almost apocalyptic,” he said.
A nearby shop was left “absolutely wrecked” and looked like a “bomb has gone off in there”, he added.
Three days of mourning has been declared in Spain, beginning on Thursday.
Spain’s Mediterranean coast is used to autumn storms that can cause flooding, but this was the most powerful flash flood event in recent memory, and scientists have linked its strength to climate change.
“When the alert came the water was already two metres high,” Carolina shouts from her balcony. “There were no police, firefighters or the mayor. No one came to rescue us.”
The distress is echoed street after street.
Carmen puts her head in her hands and weeps.
“They have lost everything,” she says, pointing at her neighbours’ houses.
Every home is in ruins and their owners are heartbroken.
Dolores shows us inside her house. She says the flood was up to the ceiling but because no help came, they have had to hammer holes in the walls to clear the water.
“I feel awful. I’m terrified and very afraid. My husband is sick – we need more help,” she says.
The level of destruction is immense.
On the street, we meet Noel with his children. The youngest toddler barefoot in the mud.
Yesterday, Noel and his wife had nothing to eat. He feels helpless.
“Right now, there are people who are trapped. The mud is up to their waists, so they can’t open their doors,” he says.
“I live on a high floor so I didn’t have problems with the flooding in my home, but I don’t have water, light, or food.”
There’s a growing feeling of desperation in this suburb.
At one point, someone shouts “food!” and people rush to grab what they can from a nearby shop.
It’s not clear if they have been let in by the owner or are looting.
The devastation is so great and at a time when people are at their most in need, they feel frustrated and alone.
In a nearby shelter we meet people from Algemesi who have been made homeless by the flood.
Carol says she has never felt so hopeless.
“There was a tree trunk that came into the front of my house. There are no walls, no ceiling. I don’t have anything. There’s nothing left,” she explains, beginning to cry.
For many, the initial trauma of this natural disaster has been compounded in the aftermath by a feeling of loss and loneliness.
Thousands of North Korean soldiers are now positioned near Ukraine’s border and likely to enter combat in the coming days, the US says.
Russian troops have been training them in artillery, drones and “basic infantry operations, including trench clearing”, said US secretary of state Antony Blinken.
He said it strongly indicated they would be used on the front line and would therefore become legitimate targets for Ukraine.
Some 10,000 North Korean troops are in Russia, including up to 8,000 in the Kursk border region, Mr Blinken said.
The troops are wearing Russian uniforms and carrying Russian gear, according to US defence secretary Lloyd Austin.
“We’ve not yet seen these troops deploy into combat against Ukrainian forces, but we would expect that to happen in the coming days,” Mr Blinken said on Thursday.
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America’s top diplomat said the recruitment of troops from North Korea to Russia’s “meat grinder” was a “clear sign of weakness”.
Mr Blinken made the assessment after he and Mr Austin met their South Korean counterparts in Washington DC.
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Foreign minister Cho Tae-yul called for the immediate withdrawal of North Korean soldiers from Russia and condemned it “in the strongest possible terms”.
They also all agreed China should do more to rein in North Korea, Mr Blinken said, adding that he’d had a “robust conversation” with Beijing this week.
Mr Austin also announced that – with the US election just days away – America would soon be announcing new security assistance for Ukraine.
The deployment of troops to Russia is down to the close relationship between President Putin and North Korea’s Kim Jong Un.
A mutual defence pact was agreed during their summit, meaning the countries will help each other if they are attacked.
The US says North Korea has also given munitions to Russia as it continues its grinding effort to take more territory in Ukraine’s east.
The White House published images earlier this month which it said showed 1,000 containers of equipment being sent to Russia by rail.
There are concerns about what military aid Russia will now provide in exchange.
North Korea test-fired an an intercontinental ballistic missile for the first time in almost a year on Thursday and there is speculation Russia may have provided technological help.
In a statement, the US, Japan and South Korea condemned the launch as a “flagrant violation” of UN resolutions.
“We strongly urge (North Korea) to immediately cease its series of provocative and destabilising actions that threaten peace and security on the Korean Peninsula and beyond,” they said.