Crypto cyberhack losses halved in 2023

The amount of hacks remains stable, but the value of the losses incurred is plummeting

Crypto cyberhack losses halved in 2023
Photo by Kaur Kristjan / Unsplash

Due to concerted efforts to address vulnerabilities, the cryptocurrency industry has started losing less to hackers. For the first time since the pandemic, the number of crypto coins lost to cyber crimes is on the decrease.

According to a new report by De.FI, a Web3 security firm, hackers stole about $2 billion worth of cryptocurrencies, a dip from the all-time high of $3.8 billion the firm reported in 2022.

“This amount, though dispersed across various incidents, underscores the persistent vulnerabilities and challenges with the DeFi ecosystem,” De.Fi noted in the report.

“2023 stood as a testament to both the ongoing vulnerabilities and the strides made in addressing them, even as interest in the space was relatively muted by the ongoing bear market in the first half of the year,” it added.

TRM Labs, a blockchain intelligence specialist, noticed a similar trend. In its research from early December, TRM said the sum of stolen crypto has declined more than 50 percent from $4 billion in 2022 to $1.7 billion.

Drawing corroboration between both reports, the amount of hacks experienced remains steady but the value of the losses incurred is plummeting, from around $4 billion to around $2 billion.

The major busts in the ecosystem saw the theft of hundreds of millions of dollars. The $200 million hits on Mixin Network and Euler Finance, and hacks against Multichain ($126 million), BonqDAO ($120 million), Poloniex ($114 million), and Atomic Wallet ($100 million) topped the headlines.

According to TRM, infrastructure attacks were the most catastrophic, as hackers used them to gain access to and exploit underlying cryptocurrency systems. They account for more than half the stolen amount, with an average of $30 million per breach.

Cross-chain is fast becoming the most preferred approach to crypto cyberattacks. It involves rapidly swapping crypto assets between different tokens or blockchains in rapid succession without legitimate business purpose. The tactic obfuscates the origins of the bad actors.

Lazarus Group, a hacking cartel reportedly affiliated with North Korea, has reportedly used the method to steal assets worth over $1 billion.

So far, 2022 is the worst year for crypto heists; blockchain monitor Chainalysis reported that upwards of $3.8 billion was stolen from investors, up from the $3.3 billion record in 2021.

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