Crypto Industry Suffers $336M Loss from Hacks and Scams in Q1

In the first quarter of 2024, the crypto industry faced significant challenges, with a staggering $336.3 million lost to hacks and scams, according to a report by Immunefi, a prominent web3 bug bounty and security services platform.

Despite the substantial $100 billion locked in web3 protocols, DeFi emerged as the primary target for cybercriminals, according to The Block. Immunefi’s data reveals that DeFi protocols bore the brunt of the attacks, accounting for all identified exploits in the first quarter, while centralized finance (CeFi) platforms remained unaffected.

Two projects suffered the most, losing a combined $144.5 million, representing 43% of the total losses. The largest heist occurred during New Year’s festivities, with an $81.7 million breach of the Orbit Bridge protocol. According to the Immunefi report, January alone saw the highest losses, totaling $133 million.

The quarter concluded with a $62 million plunder of the Blast-based NFT game Munchables, marking the second-largest assault. Notably, the stolen funds were recovered within a day after negotiations led to the hacker surrendering the assets.

22% of All Crypto Industry Hacks and Scams in Q1 Were Recovered

Despite these losses, The Block reported that there is a silver lining, as $73.9 million, or 22% of the pilfered funds, were reclaimed from seven incidents. Additionally, the frequency of attacks decreased by 17.6%, from 74 in the previous year’s first quarter to 61 this year. The current losses also reflect a 23.1% decrease from the $437.5 million lost in the same period last year.

According to the Block, Mitchell Amador, founder and CEO of Immunefi, commented on the report, stating:

“The decline in overall losses is encouraging, yet the DeFi sector continues to grapple with challenges, shouldering all losses in Q1 2024. The prevalent issue of private key compromises underscores the urgent need for fortified code and infrastructure security.”

Hacking incidents dominated the quarter, accounting for 95.6% of the losses ($321.6 million) spread across 46 events. In comparison, fraud, scams, and rug pulls accounted for a smaller slice at 4.4% ($14.7 million) over 15 incidents.

In a retrospective report, Immunefi disclosed that crypto users incurred $1.8 billion in losses to hacks and scams throughout 2023.

Immunefi has disbursed over $95 million in bounties and safeguarded upwards of $25 billion in user funds across various protocols, including Chainlink, The Graph, Synthetix, and MakerDAO, solidifying its position as a guardian of the crypto realm.

 

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