As if the pessimism around cryptocurrencies wasn't enough, the industry has historically been plagued by hackers and scam artists looking to make a quick buck. To make matters worse, it seems that tracking down and recovering lost funds is now more difficult than ever, as attackers use increasingly sophisticated methods.
According to a new report, only $4,9 million of the $204,3 million the industry lost due to attacks, scams and theft in the second quarter of 2023 was recovered, and that was significantly less than the $6,9 million recovered in the first quarter. Q2022 55. The good news, though, is that Q2023 losses were 462,3% lower than Q42,4 XNUMX, when the industry lost a whopping $XNUMX million due to hacking. and scams, and the Euler Finance flash loan attack that accounted for XNUMX% of first-quarter losses, according to presents the REKT database.
The report, prepared by the "super application" web3 and the solution antivirus DeFi with backup data from the REKT database, detailed that so far this year, the industry had recovered about $183 million, or nearly 28% of the $666,5 million lost to scams and hacks.
Image credits: DeFi, REKT
In Q2 there were more than 100 relevant attacks
This quarter had 110 recorded cases of "scams, exploits or unintentional losses," the report said. The three most important cases were the breach of Atomic Wallet with $35 million, Fintoch with $31,6 million for their alleged Ponzi scheme and exploiting a vulnerability in MEV Boost's software that led to him losing $26,1 million. These three accounted for a combined total of $92,8 million, almost half of the total losses for the quarter.
The report also found that exploits and fake new projects defined as NFTs or cryptocurrency (rug pull) accounted for $55,3 million and $47,3 million, respectively, in the second quarter, highlighting that risks and bad actors are "rampant." in equal measure." The Rug Pull, as discussed, are scams in which creators promote projects to attract capital and then close or disappear with the funds.
As for where these losses are occurring, there is a strong tilt towards two main blockchains: BNB Smart Chain and Ethereum. Both continue to be a “hotspot for fraudulent activity”, with the “trophy” held by BNB Smart Chain with 65 cases. Ethereum had just 25 cases in Q82,5. However, Ethereum is much bigger and reported losses of $57,8 million, while BNB Smart Chain (BSC), created by cryptocurrency exchange Binance, recorded $XNUMX million.
Access control-related issues accounted for more than a quarter of all losses, at $75,8 million, highlighting the prevailing vulnerabilities in centralized and decentralized finance, “as well as the urgency for stronger security measures.” ", according to the report.
While the industry saw more variety in fraudulent activity this quarter, Rug Pull they still accounted for the most scams, with 55 cases.
The need to improve security in web3 is not a new problem, as it has often been overlooked in favor of speed and growth. We have a growing number of sophisticated web3 security companies that can protect individual traders, startups and conglomerates, but protecting funds, platforms and protocols is not always easy or given enough importance in the industry.
Looking to the second half of 2023, these crypto losses are expected to continue to rise to a comparable level as more investors, founders, and builders enter the space, providing more opportunities for bad actors. Without a huge industry-wide push to emphasize protection measures and weed out scammers, this problem will not be fixed.
