Crypto Hacking and Fraud Incidents Decline in Q1 2024, Reveals Immunefi

1. Q1 2024 saw a 23% reduction in crypto hacking and fraud losses compared to the same period in 2023, says Immunefi
2. Decentralized finance (DeFi) platforms remained the primary target, with all identified exploits occurring within this sector.
3. Ethereum and BNB Chain were the most targeted networks, accounting for 73% of total losses combined.

The first quarter of 2024 witnessed a notable decline in losses attributed to hacking and fraudulent activities within the cryptocurrency space. According to a recent research report released by blockchain security firm Immunefi on March 28, the total losses amounted to approximately $336.3 million. This is marking a significant decrease from $437.5 million reported in the same period of 2023. This represents a 23% reduction in losses.

Targeted Sectors

Decentralized finance (DeFi) platforms continued to be a primary target for hackers. In fact, it is comprising all of the exploits identified by Immunefi during Q1. With nearly $100 billion locked in Web3 protocols, the vulnerability of DeFi platforms remains a pressing concern for industry stakeholders.

Two significant incidents accounted for a substantial portion of the total losses, totaling $144.5 million, or 43% of the overall amount. The largest attack, amounting to $81.7 million, targeted the cross-chain bridge protocol Orbit Bridge on New Year’s Eve. January recorded the highest monthly losses in Q1, totaling $133 million.

Trends and Insights

Despite the losses, recovery efforts have shown promise. In fact, $73.9 million (22%) of the stolen funds from seven exploits in Q1 is successfully retrieved. Notably, in one instance involving a $62 million exploit on the Blast-based nonfungible token game Munchables, funds were recovered within 24 hours as the hacker surrendered the private keys.

Hacks accounted for the majority of losses, comprising 95.6% ($321.6 million) across 46 incidents, while fraud, scams, and rug pulls accounted for 4.4% ($14.7 million) across 15 incidents. Ethereum emerged as the most targeted chain. It is followed by the BNB Chain, with both networks collectively accounting for 73% of total losses.

Call for Enhanced Security Measures

Mitchell Amador, CEO of Immunefi, emphasized the vulnerability of DeFi platforms to private key breaches. This is underscoring the urgent need for enhanced security measures across code and protocol infrastructure.

As the cryptocurrency landscape continues to evolve, stakeholders must remain vigilant and proactive. They should adopt measures addressing security vulnerabilities to safeguard investor funds and maintain trust in the ecosystem.

While the decline in hacking and fraud incidents during Q1 2024 is a positive development, it underscores the ongoing challenges facing the cryptocurrency industry in terms of security and resilience. Efforts to bolster security infrastructure and mitigate risks must remain a top priority for all stakeholders involved.