In recent years, the cryptocurrency sector has increasingly become a prime target for hackers, resulting in substantial financial losses. A recent report by Immunefi, a bug bounty and security services platform, sheds light on the alarming trends in the Web3 space during Q3 2023.
Alarming Escalation of Losses
During Q3 2023, the Web3 space witnessed a staggering total loss of over $685 million. This is a significant increase from the $428 million in losses due to hacks and fraud in Q2. The escalation of losses is a concerning trend, reflecting the growing threat posed by malicious actors.
Malicious Attacks on the Rise
Immunefi’s report underscores a concerning 59.9% increase in malicious attacks targeting poorly secured blockchain protocols. These attacks aim to illegally obtain funds, causing substantial financial damage to the cryptocurrency ecosystem. The report reveals that out of the total losses, over $662 million resulted from hacks in 49 separate incidents, while the remaining balance of over $22 million was lost to fraudulent investment schemes across 27 specific incidents.
Major Targets and Losses
Immunefi’s report further delves into the specific targets and the extent of the losses. Mixin Network and Multichain were among the hardest-hit, collectively losing $326 million to hacks, representing 47.5% of all Q3 losses. Other prominent protocols, including CoinEx, CoinsPaid, Curve Finance, and JPEG’d, also fell victim to illegal fund draining by malicious actors.
Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks, Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks
Web3 Protocols Under Attack
The report highlights that Ethereum-based projects were the prime targets, with a record number of 35 Web3 protocols falling victim to cyberattacks on the older blockchain protocol. Binance-owned BNB Chain closely followed, with 25 protocols seeing their funds drained. Surprisingly, Coinbase-owned Base suffered four incidents, representing 4.9% of the total losses across various blockchain protocols. Other blockchain platforms such as Optimism, Polygon, and Solana also reported incidents, contributing to the overall losses.
DeFi: A Persistent Target
Decentralized finance (DeFi) remains an enticing target for malicious actors due to its lack of central control, providing users with direct access and control over their accounts. The absence of intermediaries makes the DeFi space vulnerable to various attack methods.
A report by CoinGecko highlighted that the DeFi landscape lost a staggering $2.8 billion in stolen funds in 2022. Hacks in this sector employed various tactics, including verification process bypass, market manipulation, crowd looting, as well as smart contract and bridge exploits. Notably, the Ronin Network hacks, which resulted in a loss of $625 million, utilized an access hack method.
Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks, Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks,Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks,Crypto Losses Surge 59% in Q3 2023 Due to Rising Cyberattacks