Rising Crypto Losses in 2024 Amid Surge in Hacks and Coin Thefts
The ongoing bull market in the crypto sector, fueled by regulatory breakthroughs and significant events such as Bitcoin halving and the approval of cryptocurrency ETFs in the US and Hong Kong, has driven prices to new heights. However, this positive momentum is also accompanied by a surge in losses due to hacking and fraud.
Report Highlights:
According to a recent report by the security services platform Immunefi, the total losses in the crypto market due to hacks and fraud in the first few months of 2024 have actually decreased compared to the previous year. The total recorded losses for 2024 thus far amount to $473 million, a 20% drop from the $595 million reported for the same period in 2023.
In May 2024 alone, losses reached $52 million, down 12% from the $59 million recorded in May 2023. Additionally, losses in May 2024 decreased by 28% compared to the previous month.
Major Incidents:
Two projects accounted for the majority of the losses in May 2024. Crypto gaming project Gala Games suffered a loss of $21 million, while decentralized lending protocol Sonne Finance lost $20 million.
The report emphasized that decentralized finance (DeFi) projects were the primary targets of attacks in May 2024, while centralized finance (CeFi) platforms did not experience any major attacks during this period.
Causes of Losses:
Hacks remain the leading cause of losses, with 14 specific incidents in May 2024 resulting in $50 million in damages. In contrast, fraud accounted for $1.7 million, representing only 3.3% of the total losses for the same period.
Ethereum and Binance Smart Chain (BNB) were the most attacked blockchains in May 2024, making up 62% of the total losses across all affected chains. Notably, Ethereum experienced nine incidents, accounting for 43% of the total losses, while Binance Smart Chain had four incidents, representing 19% of the total losses.
Other blockchains, including Base, Arbitrum (ARB), Solana (SOL), The Open Network (TON), Blast (BLSTR), Fantom (FTM), Optimism (OP), and Polygon (MATIC), each experienced one incident, collectively accounting for 4.8% of the losses.
Conclusion:
As the crypto market enjoys a robust bull run in 2024, the industry is also grappling with increased losses due to hacks and fraudulent activities. Although the losses have decreased compared to the previous year, the total amount remains significant.
It is evident that hacks are more prevalent than fraud, underscoring the importance of enhancing security measures and addressing vulnerabilities to protect investor funds. As the market evolves, prioritizing security is crucial for maintaining investor confidence and supporting the sustained growth of the crypto industry.
