Crypto Losses Surge by 59% in Q3 Due to Cyberattacks
By Jimmy Aki
Updated on October 23, 2023, at 04:39 EDT
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Reading Time: 2 minutes
Source: Pixabay
The cryptocurrency industry has increasingly become a prime target for hackers in recent years.
A report released by Immunefi, a bug bounty and security services platform, reveals that the Web3 space experienced a total loss of over $685 million in Q3 of 2023.
This significant increase in losses is particularly concerning as hacks and frauds amounted to over $428 million in Q2 of this year.
Source: Immunefi
According to Immunefi’s recent findings, there has been a staggering 59.9% rise in malicious attacks aimed at illegally obtaining funds from poorly secured blockchain protocols.
Providing more details, the platform stated that hacks resulted in losses of over $662 million across 49 separate incidents.
The remaining balance of over $22 million was lost to fraudulent investment schemes captured in 27 specific incidents.
The report also revealed unsettling findings. Immunefi identified Mixin Network and Multichain as the hardest-hit, with a combined loss of $326 million due to hacks.
This massive loss accounted for 47.5% of all losses recorded in Q3. Other protocols, such as CoinEx, CoinsPaid, Curve Finance, and JPEG’d, also fell victim to illegal fund draining by malicious actors.
Furthermore, Ethereum blockchain-based projects were the primary targets of these bad actors, with a record number of 35 Web3 protocols being attacked on the older blockchain protocol.
Binance-owned BNB Chain came in second on the list, with 25 protocols experiencing fund drainage.
Surprisingly, Coinbase-owned Base suffered four incidents, representing 4.9% of total losses across chains.
Optimism followed with three incidents, while Polygon and a few others experienced two incidents, and Solana had only one incident on its record.
Zooming in on the main perpetrators behind this series of cyberattacks, the North Korean-sponsored Lazarus Group emerged at the top.
Source: Immunefi
Immunefi revealed that this infamous hacking team made away with over $208 million, accounting for 30% of the total losses suffered in Q3.
Lazarus Group executed their heists on CoinEx, Stake, Alphapo, and CoinsPaid.
DeFi Remains an Attractive Target for Hackers
The crypto market is divided into various sub-sectors, with decentralized finance (DeFi) being one of the most prominent.
As the name suggests, trades in DeFi are not centrally controlled, allowing users to have direct control and access to their accounts.
There is no intermediary involved, and anyone can buy and sell digital assets. This lack of central oversight has made the DeFi space a prime target for malicious actors.
According to a report by CoinGecko, the DeFi landscape suffered an astonishing $2.8 billion in stolen funds in 2022.
The hacks were carried out using various methods, including bypassing verification processes, market manipulation, crowd looting, as well as smart contract and bridge exploits.
The report highlighted Sky Mavis’ Ronin Network hack, which resulted in a loss of $625 million, as the network that incurred the highest crypto losses. This security breach was executed through an access hack.
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