Crypto Losses From Hacks and Scams Soar 112% in Q2 2024, Reaching Over $572M

Highlights:

• Q2 2024 saw crypto industry losses spike to $572.7M, up sharply from previous quarters.
• CeFi platforms lost $401 million lost in five incidents, a 984% increase year-over-year.
• Despite challenges, $26.7 million, or 5% of losses, was recovered in Q2.

According to the latest report from web3 bug bounty and security services platform Immunefi, the crypto industry lost $572.7 million to hacks and scams in the second quarter of this year across 72 incidents. 

🚨 Crypto Hacks and Scams Double, Reaching $572M in Q2 2024

Crypto losses from hacks and scams soared by 113% in Q2 2024, reaching $572 million compared to $220 million in Q2 2023, as reported by @immunefi.

CEX hacks were the main contributors, reversing a previous downtrend.… pic.twitter.com/0QV36wYm1b

— VERITAS PROTOCOL (@veritas_web3) June 27, 2024

The losses mark a nearly 70.3% rise from the $336.3 million stolen in Q1 and a 112% increase compared to Q2 2023, when fraudsters and hackers stole $265.5 million. The majority of the losses in the quarter stemmed from hacks on centralized exchanges. Meanwhile, year-to-date (YTD) crypto losses totaled $920.9 million, up 24% from last year’s total of $702.9 million.

Prior to the second quarter, losses from scams and hacks had been decreasing, with Immunefi reporting a 23% reduction in Q1. This downward trend persisted through April and most of May, but losses increased sharply at the end of May and June. In May alone, losses amounted to $358.5 million, marking the highest monthly total of the second quarter.

CeFi Becomes Emerges as Key Target for Crypto Hacks

According to the report, the industry experienced 53 hacks and 19 rug pulls in the second quarter. Centralized finance (CeFi) platforms lost about $401 million across five incidents during the quarter, accounting for 70% of the total losses. This marks a 984% increase from the same period last year. Meanwhile, Decentralized Finance (DeFi) platforms witnessed a 25% decrease in losses, totaling $171.3 million across 62 incidents.

Two hacks alone caused the majority of the losses, totaling $360 million, or 62.8% of the total. On May 31, a $305 million exploit targeted the Japanese cryptocurrency trading platform DMM Bitcoin, marking the largest attack. Additionally, on June 23, $55 million was stolen from the Turkish crypto exchange BtcTurk.

Sharing his perspective on the quarter, Immunefi founder and CEO Mitchell Amador stated:

“This was evident during this quarter, where losses surged primarily due to hacks targeting CeFi infrastructure, surpassing DeFi, despite a smaller number of hacks in that sector. Robust measures to safeguard the entirety of the ecosystem are crucial.”

Hackers Target Ethereum and BNB Chain Most

Ethereum and BNB Chain remained the primary targets yet again, as observed in Q1. Ethereum encountered the highest number of individual attacks, totaling 34 incidents, which accounted for 46.6% of the losses on chains. BNB Chain followed closely with 18 incidents, comprising 24.7% of the total losses. Arbitrum, Polygon, Fantom, Linea, Blast, Optimism, Solana, Mantle, and TON made up the remainder of the incidents.

Recovered Funds Represent 5% of Q2 Losses

Some of the funds stolen in the second quarter were subsequently recovered by security researchers. For instance, the attacker who exploited the Gala Games protocol returned nearly all of the funds. Some reports suggested that the attacker connected to his wallet without using a virtual private network (VPN), exposing his IP address and possibly making him vulnerable to prosecution. Yolo Games, Bloom, and Alex Labs also recovered most of the assets lost from their exploits, according to Immunefi.

In Q2 2024, approximately $26.7 million, or 5% of the total losses, was recovered, showing a slight improvement from the 3.9% recovery rate in Q2 2023. This indicates progress in tracking and reclaiming stolen assets despite ongoing challenges.

Crypto Losses to Deep Fakes Could Reach $25B in 2024: Warns Bitget

In 2024, losses from deep fake crypto scams are expected to surpass $25 billion, more than doubling last year’s losses, according to Bitget. In a June 27 report, the crypto exchange emphasized that the number of deep fakes globally has increased by 245% this year. Countries like China, Germany, Ukraine, the United States, Vietnam, and the United Kingdom have been hit the hardest by deep fakes in early 2024. The crypto industry has seen a 217% increase in deep fake incidents compared to the first quarter of 2023.

Have you ever been caught up in a crypto deepfake scam?

Bitget Research just released a report highlighting that Deepfakes may reach 70% of crypto crimes in two years and annual losses caused by crypto deepfakes may reach $25.13 billion by the end of 2024. pic.twitter.com/xnwj7xFLOy

— Bitget (@bitgetglobal) June 27, 2024

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