Crypto Investors Lost $685.5 Million in Q3 2023, Reports Show
A recent report by Immunefi, a bug bounty and security services platform, reveals that Q3 2023 was the worst quarter of the year in terms of losses due to hacks and frauds in the crypto industry. According to the report, crypto investors lost a total of $685.5 million in Q3 2023, which is a 59% increase compared to the previous year’s losses of $428 million.
The amount stolen in Q3 2023 represents a significant surge from both Q1 2023 (55.7% increase) and Q2 2023 (158.2% surge). Notably, two major hacks in Mixin Network and Multichain accounted for almost half of the total stolen amount, totaling $326 million.
Recovery efforts have been less successful this quarter compared to previous ones. In Q1 2023, 40.5% of the stolen funds were recovered through specific instances involving Euler Finance and SperaxUSD. However, in Q3 2023, only $61.1 million (8.9% of total losses) could be recovered.
The report also highlights that the Lazarus Group, a North Korean hacker cell, was responsible for stealing $208.6 million, representing 30% of the total losses in Q3 2023. The group targeted platforms like CoinEx, Alphapo, Stake, and CoinsPaid.
High-Activity Chains Are Prime Targets
The decentralized finance (DeFi) sector suffered more losses compared to centralized counterparts in Q3 2023. DeFi accounted for 72.9% of the total losses, while centralized finance (CeFi) hacks made up 27.1%.
Ethereum, BNB Chain, and the Coinbase-incubated Base blockchain were among the most targeted chains by hackers. According to Immunefi analysts, bad actors focus on blockchains with high activity and a larger amount of funds at stake.
The report also highlights that new networks and token releases associated with airdrop farming have become prime targets for fraudulent schemes like rug pulls. Airdrop farming involves receiving tokens from a new blockchain or application, while rug pulls refer to scams where project developers steal users’ funds deposited into liquidity pools.
Finally, the number of hacking incidents increased from 63 in the previous quarter to 76 independent incidents in Q3 2023. This marked a year-over-year increase of 153%.
Hot Take: Crypto Security Concerns Continue to Grow
The rising number of hacks and frauds in the crypto industry is a cause for concern among investors. The significant increase in losses during Q3 2023 highlights the need for improved security measures and robust risk management strategies.
Investors must remain vigilant and take proactive steps to protect their assets. This includes utilizing secure wallets, practicing strong password hygiene, and conducting thorough due diligence before investing in new projects or platforms.
Regulators and industry stakeholders also play a crucial role in enhancing security standards and implementing effective measures to combat cyber threats. Collaboration between platforms, exchanges, and security experts is essential to create a safer environment for crypto investors.
Ultimately, as the crypto industry continues to evolve and attract more mainstream attention, addressing security concerns will be paramount to building trust and ensuring its long-term success.
By
By
By
By
By