The cryptocurrency market experienced its worst month in 2023, with July losses exceeding $486 million. Nearly half of this amount is attributed to one Multichain exploit. Despite regulatory revival around cryptocurrencies, barely 1% of lost assets were recovered.
July 2023 left a painful mark on the cryptocurrency market, recording the largest monthly losses since the start of the year. According to a report provided by De.Fi for Cointelegraph [https://cointelegraph.com/], the total losses for July amounted to $486 million. This is over six times more than the entire year of 2022.
Factors contributing to such a drastic increase were numerous, widely commented attacks and exploits, as well as increasing legislative activity related to cryptocurrencies and digital assets.
The situation concerning the recovery of lost funds is alarming. The report shows that only $6.15 million were recovered, which is just over 1% of all cryptocurrencies and digital assets that went missing in July. According to a document provided by De.Fi [https://de.fi/], researchers believe that not enough actions are being taken to quickly recover the lost funds.
Most of the losses were recorded on the Ethereum network – as much as $447 million in 36 cases. Among them, the most severe were the Multichain exploit ($231 million) and the Alphapo exploit (approx. $100 million). The Base network came in second, losing $23 million in one case. Third place belongs to Binance, where losses amounted to nearly $11 million in 18 cases.
The most common cause of fund loss was “access control issues”, which resulted in losses of $364 million. “Rugpulls” are another significant problem, which in 38 reported cases led to losses of about $36 million. “Reentrancy” attacks led to losses amounting to about $78 million.
Despite a decidedly negative picture of the situation, the De.Fi report contains one positive note: no “exit scams” were reported in July.
