The Decrease in Crypto Hacks Masks a Darker Reality
In 2023, the cryptocurrency market saw a decrease in losses due to hacks, totaling $1.9 billion. However, this seemingly positive trend hides a more troubling reality. Hacken, a blockchain security auditor, reports that the frequency and sophistication of attacks are on the rise.
2023 Sees Onslaught of ‘Sophisticated Attacks’
According to Hacken’s security report for 2023, the total amount lost to hacks and scams decreased to $1.9 billion. The largest theft involved Multichain, which lost $231 million from its bridge. While this is lower than the Terra Luna incident of 2022, where over $40 billion was lost, Hacken still recorded a 14% increase in the number of attacks compared to the previous year.
The most damaging type of vulnerability this year was unauthorized access to hot wallets, resulting in an average of $31 million per incident. Flash loan attacks and rug pulls also caused significant losses.
Decoding Impact
The lending and borrowing sector, particularly smart contract-based money markets, was heavily impacted by hacks in 2023. These platforms became prime targets for hackers who exploited flash loans. Bridges and centralized exchanges were also frequently targeted due to their substantial liquidity pools.
BNB Smart Chain and Ethereum were the primary targets for exploits, with BNB Chain reporting 214 incidents and Ethereum encountering 176 incidents. Even smaller platforms like Arbitrum experienced their fair share of incidents.
Hot Take: The Ongoing Battle Against Crypto Hacks
While the decrease in losses due to hacks may seem like progress, the rising frequency and sophistication of attacks indicate a continuing battle for security in the cryptocurrency market. Companies and platforms must remain vigilant in implementing robust security practices to protect user funds and maintain trust in the industry.
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