Web3 Hackers Exploit Smart Contract Codes, Resulting in $126 Million Loss in January 2024
In January 2024, hackers took advantage of vulnerabilities in smart contract codes used by crypto and decentralized finance (defi) protocols, resulting in a significant increase in funds lost. AMLBot Co-Founder and CEO Slava Demchuk revealed that over $126 million was stolen from various defi platforms last month. The attacks were mainly due to vulnerabilities like compromised multi-sig wallets and loan attack vectors.
Orbit Bridge Hack and Industry Improvement
One of the major incidents in January was the hack on Orbit Bridge, a cross-chain protocol that lost more than $80 million. Ozys, the company behind the service, suspects the involvement of a former employee. Despite these attacks, Demchuk mentioned that cybersecurity within the industry is improving year by year, with illegal digital asset activity declining.
Reduction in Stolen Wealth Transactions
A report by Chainalysis supports this claim, showing a 39% decrease in stolen wealth transactions involving cryptocurrencies and blockchain networks.
The Complex Nature of Blockchain Security and Novel Hacker Strategies
Demchuk explained that the decentralized nature of blockchain adds complexity to security protocols, requiring continuous improvement from projects to mitigate risks. Some projects lack industry-standard security measures, while hackers devise new strategies to bypass existing safeguards.
Key Areas for Addressing Digital Currency-Related Crime
To combat these issues, Demchuk highlighted two crucial aspects: real-time transaction monitoring and increased collaboration among global law enforcement agencies. Additionally, better communication between crypto exchanges, wallet providers, and blockchain developers can facilitate the timely sharing of threats and suspicious activity.
Gradual Attainment of Comprehensive Security
AMLBot’s CEO emphasized that through collaboration and infrastructure development, the cryptocurrency industry will gradually achieve comprehensive security over time.
Hot Take: Enhancing Security Measures and Collaboration for a Safer Crypto Landscape
The increase in funds lost to web3 hackers highlights the urgent need for enhanced security measures within the crypto industry. While significant progress has been made, vulnerabilities in smart contract codes and novel hacker strategies continue to pose risks. To address these challenges, real-time transaction monitoring, increased collaboration among stakeholders, and better communication are essential. By implementing these measures, the industry can work towards a safer and more secure environment for crypto users and investors. With continuous improvement and collective efforts, comprehensive security can be achieved over time.
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