Cryptocurrency adoption has been on the rise recently, but it comes with a dark side as hacks and scams are also growing. The years 2022 and 2023 have been particularly damaging for the crypto world. In 2023, hackers managed to steal $1 billion, a 60% decrease compared to the pre...
- The total crypto value hacked in 2023 stood at $7.21 billion.
- DeFi accounts for $5.53 billion, while bridges lose $2.66 billion.
Cryptocurrency adoption has been on the rise recently, but it comes with a dark side as hacks and scams are also growing. The years 2022 and 2023 have been particularly damaging for the crypto world. In 2023, hackers managed to steal $1 billion, a 60% decrease compared to the previous year, but the number of hacks has increased.
So far in 2023, the total value hacked stands at $7.21 billion, with $5.53 billion of that coming from the DeFi sector and $2.66 billion from bridges, according to data from DeFilama. And the third quarter of 2023 crypto hacks has been the most financially damaging. Nearly $700 million in digital assets were lost to various security incidents, as reported by blockchain security firm CertiK.
In their quarterly report, CertiK highlighted 184 security incidents in July, August, and September 2023. It resulted in losses of over $699 million. This surpasses the losses of $320 million in the first quarter and $313 million in the second quarter.
Major 2023 Crypto Hacks
In July, Curve Finance, a key player in the DeFi ecosystem, confirmed the loss of $52 million in digital assets due to a vulnerability in certain versions of the popular smart contract coding language Vyper. Multichain, a blockchain bridging protocol, lost $125 million in assets. It led to the platform’s closure after Chinese authorities detained its CEO in May.
One of the most significant incidents contributing to the crypto exploits in September 2023 was the exploit of the cross-chain protocol Mixin Network. On September 25, the company suspended all withdrawals. And deposits after confirming the loss of $200 million worth of assets from its mainnet.
CertiK’s quarterly report also pointed out that North Korea’s state-affiliated hacking group, Lazarus, remained a dominant threat actor in the third quarter. It is responsible for at least $291 million in confirmed losses in 2023. They continued their malicious activities in the crypto space.
Recent research indicates that the reduced rewards and increased risks have made DeFi less appealing, resulting in a significant 15% decline in Total Value Locked (TVL), which dropped from $45.5 billion to $35.5 billion. Currently, DeFi’s total volume represents $5.64 billion, accounting for 8.23% of the entire cryptocurrency market’s 24-hour trading volume.
The challenges of security and resilience against hacks and exploits remain a critical concern in the crypto ecosystem. In 2024, the industry is expected to intensify its efforts to fortify safeguards. And bolster trust in the digital asset landscape.