May 22, 2024
De.Fi Cryptocurrency Losses Hit $2B in 2023 Exploits
Latest Cryptocurrency News

De.Fi: Cryptocurrency Losses Hit $2B in 2023 Exploits

Cryptocurrency users faced a reduced but still substantial loss of nearly $2 billion due to scams, rug pulls, and hacks in 2023, compared to the estimated $4.2 billion in 2022, which included the collapses of Terra, Celsius, and FTX totaling $40 billion. The annual report from security app De.Fi attributes the decrease to enhanced security protocols, heightened community awareness, and decreased market activity. The drop is even more significant when factoring in the losses from the mentioned collapses.

This decline aligns with a bear market that saw major alternative tokens experiencing significant slumps, recovering as market conditions turned more bullish. Notably, the recovery rate of funds improved from 2% in 2022 to around 10%, according to De.Fi.

Ethereum, the leading blockchain by active users and locked value, suffered the highest losses, with approximately $1.35 billion erased in around 170 incidents. Ethereum’s extensive ecosystem and high-profile projects make it an appealing target for malicious actors. The most substantial exploit occurred in July, with a $230 million attack on the cross-chain platform Multichain.

BNB Chain was also targeted, losing $110.12 million across 213 incidents, while zkSync Era and Solana faced losses of $5.2 million and $1 million, respectively, in attacks.

Centralized platforms, including exchanges and trading platforms, incurred losses totaling $256 million across seven cases. The largest of these incidents was the November attack on Poloniex, resulting in a $122 million loss.

Access control exploits proved to be the most damaging, resulting in losses of over $852 million in 29 instances. These exploits take advantage of weaknesses in permissions and access rights within smart contracts or platforms, providing unauthorized access to funds or critical functionalities.

Flash-loan attacks, exploiting the uncollateralized loan feature in decentralized finance (DeFi), led to the loss of $275 million in 36 cases. Exit scams, where a rogue developer drains liquidity or disappears after raising funds, accounted for $136 million across 263 cases. Despite the reduction in overall losses, the report highlights persistent security risks within the cryptocurrency industry.

Image By flatart

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