By Michael Scott
Blockchain security firm Immunefi has, in its Thursday, March 28 publication, indicated that the crypto industry witnessed 15 frauds and 46 hacking incidents. The crypto industry experienced a 23% decline in losses from hacking and scams in 2024’s first quarter compared to last year.
Quarterly Loss to Hackers and Fraud Decline by 23%
The Immunefi report reveals that the total losses to hackers and fraudsters targeting the crypto industry in quarter 1 approximates $336.3 million. The losses declined by 23% from $437.5 million lost in 2023’s first quarter.
The Immunefi report illustrates that 46 hacks and 15 frauds were reported in the initial quarter. The blockchain security firm illustrated that the majority of hackers are attracted to decentralized finance (DeFi) and web3 protocols where nearly $100 billion is locked. Immunefi illustrated that DeFi and Web3 protocols account for the entire exploits identified by the blockchain security firm while centralized finance platforms and zero within the centralized finance platforms.
Immunefi illustrated that the two projects suffered the bulk of the losses at 43%, translating to $144.5 million. The intelligence firm indicated that the cross-chain bridge hack to the Orbit Bridge protocol was the largest, with $81.7m lost during the New Year’s Eve exploit.
DeFi Platforms Vulnerable to Private Key Breaches
January witnessed the highest losses in the month, with $133M lost to the criminal actors. Immunefi chief executive Mitchell Amador illustrated that DeFi platforms were susceptible to private key breaches.
Amador urges the need for enhanced security deployed to the code and infrastructure of DeFi protocols. The report highlights that Blast-based Munchables suffered the second-largest attack that led to a $62 million loss for the non-fungible token (NFT) based game. The report credited the recovery of the funds when the hacker surrendered private keys linked to the wallets holding the Munchables’ assets.
Immunefi report illustrates that 22% of the funds stolen during seven exploits, translated to $73.9 million, were retrieved. Notably, the attacks were reduced by 17.6%, from 74 recorded in Q1 2023 to 61 this year.
Immunefi report reveals that hacks account for 95.6% of losses from the 46 incidents, translating to $321.6 million. Fifteen incidents were recorded comprising fraud, scams, and rug pulls to account for 4.4% at $14.7 million.
Ethereum and BNB Chain Top 2024 Q1 Losses
Immunefi finds Ethereum to be the criminals’ preferred target. BNB chain takes second spot as both chains suffered 73% of the entire quarterly losses.
Ethereum network had 33 attacks whose exploit accounted for 51% of the losses. The 12 attacks suffered by BNB Chain represent 22% of funds exploited. The report identifies several incidents on other chains, including Base, Polygon, Optimism and Arbitrum. Also, Solana, Blast, Conflux Network and Bitcoin suffered the unfortunate attacks.
The decline reported by Immunefi coincides with fellow blockchain security firm TRM Labs revealing that scams and frauds declined to a third of the crypto crime witnessed in 2023. While the total illicit funds fell by 9%, the criminals received crypto valued at $34 billion.
Crypto Crime Decline in 2023
The decline in hacking losses reported by Immunefi mirrors the findings by TRM Labs that hack proceeds were on a decline starting last year.
The TRM Labs’ report indicates that hack proceeds halved from $3.7B in 2022 to $1.8B in 2023, with North Korean actors behind a third of the exploits from crypto attacks. The criminals only made off with 30% less than proceeds in 2022.
The TRM Labs attributed the decline in scams and fraud volumes to increased vigilance across the crypto industry. Besides, industry-wide coordination supported by enforcement actions to fight off crypto crime is paying off. TRM Labs indicated that the addresses linked to either scams or fraud declined significantly. The payments dropped from $13.9 billion in 2022 to $12.5 last year.