Web3 Projects Suffer $2 Billion in Losses to Hacks, Rug Pulls, and Phishing Attacks
In 2023, web3 projects experienced losses of over $2 billion due to hacks, rug pulls, and phishing scams, according to a report by blockchain security firm Beosin. The report reveals that there were 191 major attacks resulting in approximately $1.397 billion in losses, while rug pulls caused losses of $388 million and phishing scams stole $238 million.
Rug Pulls and Phishing Scams
Rug pulls occur when developers promote a new cryptocurrency project to investors, sell affiliated tokens, withdraw the funds raised during token sales, and disappear. Beosin’s report highlights that decentralized finance (DeFi) projects were targeted in 68% of the 191 major hacks, resulting in $408 million worth of losses. Additionally, 51.8% of the stolen funds remained in hacker addresses.
Increasing Crypto Crime
The total losses from hacks, rug pulls, and phishing scams decreased by nearly 54% compared to the previous year. However, offline crypto crime saw a significant increase in 2023. Global crypto crime losses reached $65.68 billion this year, a rise of about 377% from 2022. The top three crime types by losses were illegal gambling, money laundering, and scams.
Hot Take: Web3 Projects Face Significant Security Challenges
Web3 projects continue to face significant security challenges as they navigate the evolving landscape of decentralized technologies. The prevalence of hacks, rug pulls, and phishing scams highlights the need for robust security measures and increased awareness among investors and project teams. As the adoption of web3 technologies accelerates, it becomes crucial for stakeholders to prioritize security and implement comprehensive risk mitigation strategies to protect user funds and maintain the integrity of the ecosystem.
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