Total Crypto Hacks in 2023 Set to Exceed $1 Billion
The amount lost to crypto hacks in 2023 is on track to surpass $1 billion, with $900 million already stolen by hackers as of September 30. Although this figure is lower than the $2.7 billion lost in similar attacks last year, the number of hacks has increased. The decline in asset prices and reduced DeFi TVL have contributed to the smaller average haul this year, as there is less value locked into protocols for hackers to target. However, it is worth noting that attackers are focusing their efforts on projects rather than individuals, indicating that users are taking wallet security more seriously.
Identifying the Culprits Behind the Major Hacks
While public blockchains provide a permanent record of hacking incidents, they do not always reveal the identity of the attackers. Onchain analytics service Cielo has compiled a public list of wallets associated with some of this year’s biggest hacks, including Mixin ($200 million), HTX ($8 million), and CoinEx ($55 million). DefiLlama, which tracks major crypto hacks, attributes these incidents to various methods such as database attacks and compromising private keys. While state-sponsored groups like North Korea’s Lazarus Group have been implicated in some high-profile hacks, there are diverse actors involved in malicious activities within the crypto space.
Following the Money: Targets and Vulnerabilities
Hackers tend to target poorly secured protocols, liquidity pools, and smart contracts due to the potential for financial gain. However, individual users are also at risk. Wallets with significant value can be easily identified onchain, providing hackers with potential targets for social engineering attacks if they can connect a wallet to its owner. Recent examples include Vitalik Buterin and Mark Cuban falling victim to SIM swap attacks and phishing links. Despite these incidents, improved security tools are making web3 wallets more robust, and the frequency of hacks is emphasizing the importance of strong opsec practices among users.
Hot Take: Crypto Holders Remain Resilient Despite Hacks
Although crypto hacks continue to pose a threat, holders are adapting to the risks. The increased focus on wallet security and the development of more secure tools are positive signs for the industry. As market conditions are expected to improve in Q1, crypto holders who have managed to retain their assets will feel confident in navigating any challenges that may arise in 2024.
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