Cryptocurrency enthusiasts received a glimmer of good news as the industry witnessed a significant decline in losses attributed to hacking and scams during the first quarter of 2024. A recent report published by blockchain security firm Immunefi revealed a notable 23% decrease in losses compared to the same period in 2023.

Key Findings

According to the report released on March 28, 2024, the total amount lost to hacking and fraudulent activities in Q1 of 2024 stood at approximately $336.3 million. This marked a substantial decrease from the $437.5 million recorded during the same quarter of the previous year.

The report identified a total of 46 hacking incidents and 15 cases of fraudulent activities, painting a detailed picture of the cybersecurity landscape within the cryptocurrency space.

Focus on DeFi

Decentralized finance (DeFi) platforms continued to attract attention, with nearly $100 billion in total value locked in Web3 protocols. Despite their growing popularity, DeFi platforms remained a primary target for hackers, accounting for all of the exploits identified by Immunefi in Q1.

Two notable projects bore the brunt of the losses, amounting to $144.5 million or 43% of the overall amount. The largest attack, totaling $81.7 million, targeted the cross-chain bridge protocol Orbit Bridge on New Year’s Eve, making January the month with the highest losses in Q1.

The second-largest attack involved a $62 million exploit on the Blast-based nonfungible token game Munchables. Fortunately, funds were recovered within 24 hours as the hacker surrendered the private keys to the wallet containing Munchables’ assets.

Recovery Efforts

Despite the losses, there were instances of successful recovery efforts. Overall, $73.9 million, or 22% of the stolen funds from seven exploits in Q1, were retrieved. The report also highlighted a decrease in the number of attacks by 17.6%, from 74 incidents in Q1 2023 to 61 in 2024. Hacks accounted for the majority of losses, representing 95.6% ($321.6 million) across 46 incidents. Fraud, scams, and rug pulls accounted for the remaining 4.4% ($14.7 million) in 15 incidents.

Targeted Chains

Ethereum emerged as the most targeted chain, with 33 incidents accounting for 51% of the losses. The BNB Chain experienced 12 attacks, representing 22% of the exploited funds. Other incidents were identified across various networks including Arbitrum, Solana, Optimism, Bitcoin, Blast, Polygon, Conflux Network, and Base.

Mitchell Amador, CEO of Immunefi, emphasized the urgent need for enhanced security measures across DeFi platforms, particularly addressing vulnerabilities related to private key breaches.

Despite the challenges, the cryptocurrency industry continues to evolve, with stakeholders increasingly prioritizing security to safeguard digital assets and maintain trust within the ecosystem.