The Crypto Industry Suffers Its Most Damaging Month Yet
In November, the cryptocurrency industry experienced its most damaging month for crypto theft, scams, and exploits, resulting in a total loss of $363 million, according to blockchain security firm CertiK. Exploits alone accounted for $316.4 million in losses, while flash loans caused $45.5 million in damage. Additionally, exit scams resulted in a loss of $1.1 million.
Exploits on Poloniex and HTX/Heco Bridge
The largest exploits in November occurred on Poloniex and HTX/Heco Bridge, with losses of $131.4 million and $113.3 million, respectively. A single victim also fell victim to a phishing attack, losing $27 million in the third-largest exploit of the month. The KyberSwap attack accounted for nearly all the damage caused by flash loan attacks, totaling $45 million.
A Record-Breaking Month
The total losses in November surpassed the previous record set in September, which was $329 million due to the Mixin Network attack that drained $200 million. In 2023 so far, a total of $1.7 billion has been lost to exploits, exit scams, and flash loan attacks. However, this amount only represents 54% of the total crypto drained in 2022 ($3.7 billion) and 2021 ($1.7 billion).
New Security Pitfalls Hindering Adoption
Ronghui Gu, one of CertiK’s founders, emphasized that standard smart contract audits are no longer sufficient to prevent thefts and exploits. Thieves continue to find new ways to exploit protocols and victims using methods like SIM-swapping and multisignature vulnerabilities. These incidents are scaring away potential adopters of Web3, hindering the industry’s growth. Christian Seifert, a researcher at Forta Network, compared the impact to losing all your savings due to a bank break-in, stating that it would deter people from using that bank. Jerry Peng, a research analyst at 0xScope, also highlighted how these incidents are discouraging exploration of the Web3 space.
Hot Take: Crypto Crimes Reach Unprecedented Heights
The cryptocurrency industry faced its most devastating month in November, with losses totaling $363 million due to thefts, scams, and exploits. Exploits accounted for the majority of the losses, followed by flash loans and exit scams. Poloniex and HTX/Heco Bridge experienced the largest exploits, while a phishing attack targeted a single victim. The KyberSwap attack dominated flash loan damages. These alarming figures surpass previous records and highlight the urgent need for improved security measures. Industry experts stress that standard smart contract audits are no longer sufficient to prevent new and evolving forms of attacks. As a result, potential adopters are being scared away from exploring the Web3 space, hindering its growth and adoption.
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