The year 2023 brought unexpectedly positive news for the cryptocurrency world. After years of unease caused by regular hacking attacks and scams, the industry experienced a significant breakthrough in security matters. Hacken, a company specializing in crypto security, provided a report shedding light on the dramatic decrease in financial losses due to cybercrime within this technology. These data herald a new era for the decentralized finance (DeFi) ecosystem, emphasizing the progress and maturity the industry has gained recently.
In the past year, the blockchain industry saw a significant decrease in financial losses caused by hacking attacks and fraud. Total losses amounted to $1.9 billion, which starkly contrasts with the astronomical figures from previous years. This significant reduction indicates effective security measures and more efficient addressing of security vulnerabilities.
The most attacks were recorded on the BNB Chain (214 attacks) and Ethereum (178), with most of them classified as “rug pulls” – dishonest practices where project creators pull out, taking user investments with them. An interesting aspect of the report is the geographical distribution of these incidents, indicating the global nature of blockchain-related threats and the need for international cooperation to combat them.
The United States led in the number of attacks (15), followed by Singapore (13) and the United Kingdom (5). In China, despite a relatively low value of funds stolen per attack (an average of $5 million), it still poses a serious threat.
Although year-to-year losses decreased, this does not imply a reduction in the threat. The number of attacks increased by 14% compared to the previous year, indicating an evolving and expanding attack surface. The diversity of attacks, from advanced breaches to flash loan attacks, testifies to the continuous refinement of strategies by attackers.
The largest theft of the year was an attack on the Multichain bridge, where $231 million disappeared, highlighting the importance of security in inter-chain operations. Despite the high profile of some attacks, for the first time in the industry, a significant portion of stolen assets was recovered – about 20%, or $400 million. This was possible due to quick responses, the goodwill of some hackers, and increased law enforcement activity.
The Hacken report emphasizes the key importance of audits and bug bounty programs in detecting and mitigating potential threats. Nevertheless, it also points out the lack of preparedness in many projects, highlighting the need for more advanced and threat-focused security audits.
In the future, the industry is expected to face new challenges related to the implementation of Layer 1 and Layer 2 solutions, which may open new fronts for potential attacks. Therefore, the report recommends continuing work on improving access controls, countering flash loan attacks, and promoting a proactive security culture and collaboration in the industry to jointly strengthen defense mechanisms.
The year 2023 witnessed significant progress in cryptocurrency security, leading to a substantial reduction in financial losses related to cyberattacks. Nonetheless, the industry must remain vigilant and continue to work on strengthening security measures to maintain this positive trend and ensure further development and stability of the DeFi sector. Challenges remain, but with each passing year, the industry becomes more resilient to threats, thereby building trust among users and investors.
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