The High Number of Hacks and Stolen Funds in Q3 2023
A recent study conducted by blockchain security auditor Hacken has revealed that there were a total of 117 hacks during the third quarter of 2023, resulting in the theft of over $720 million. This marks a significant increase compared to the previous quarter, which saw 131 hacks but only $327 million stolen.
Access Control Breaches: The Most Financially Damaging Attacks
According to the report, access control breaches were responsible for the highest financial losses, with a total of $449 million lost in just 8 incidents. This highlights the fact that the “human factor” remains the most vulnerable aspect of the crypto industry, as these breaches are often caused by human error or negligence.
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Rug-Pulling Incidents: The Most Prevalent Form of Attack
Although rug-pull incidents resulted in lower losses ($49.80 million) compared to access control breaches, they were found to be the most prevalent form of attack. Rug pulls are exit scams where liquidity is suddenly withdrawn, often accompanied by changes in tokenomics or smart contracts.
The report emphasized the importance of understanding and preventing rug pulls, as they have been the most common type of exploit this year. Despite the relatively low average amount stolen per incident ($638,594), rug pulls are one of the simplest scams to prevent.
The Problem with Poor Audit Scores
The Hacken report also highlighted the issue of poor audit scores for crypto projects. Out of 78 examined rug pull incidents, only 15% had been audited. Users often overlook these scores, but they can indicate deeper problems within a project.
An example provided in the report is Magnate Finance, which had a poor audit score indicating that the token could be manipulated. Despite this warning, many users continued to participate in the project for almost 3 months, resulting in the theft of over $5 million.
Advice for Crypto Investors
The report advised crypto investors to thoroughly analyze token ownership, liquidity conditions, and audit outcomes before investing their funds. It also recommended prioritizing projects with renounced admin controls and community-led finances, as these factors can contribute to greater security and transparency.
Hot Take: The Ongoing Threats in the Crypto Industry
The recent study by Hacken highlights the alarming number of hacks and stolen funds in the crypto industry during Q3 2023. The findings emphasize the vulnerability of the human factor in access control breaches, which continue to cause significant financial losses. Additionally, rug-pulling incidents have emerged as the most prevalent form of attack, despite their relatively lower average losses per incident. This highlights the need for increased awareness and preventive measures to protect crypto investors.
