There is a report by web3 "Super App" and antivirus solution DeFi that cryptocurrency losses due to hacks, scams and rug pulls in Q2 2023 are around $204 million. Though same was around $462 million in Q2 2022, making current losses half from same quarter in previous year.
However, the report also found that only $4.9 million of the $204.3 million lost in Q2 was recovered, which is significantly less than the $6.9 million recovered in Q2 2022.
The report attributed the decline in losses to a number of factors, including increased awareness of crypto security risks, improved security practices by crypto projects, and increased scrutiny of crypto exchanges by regulators.
Despite the decline in losses, the report noted that the crypto industry still faces a significant security threat. In the first half of 2023, the industry lost a total of $666.5 million to hacks, scams, and rug pulls.
The report also found that the majority of losses in Q2 were due to hacks of decentralized finance (DeFi) projects. DeFi projects are financial applications that are built on top of blockchain technology and allow users to lend, borrow, and trade cryptocurrencies without the need for intermediaries.
The report highlighted a number of DeFi hacks that occurred in Q2, including the hack of the Beanstalk Finance protocol, which resulted in the loss of $182 million, and the hack of the Harmony Horizon bridge, which resulted in the loss of $100 million.
The report also found that rug pulls were a significant source of losses in Q2. Rug pulls are a type of scam in which developers abandon a crypto project after raising funds from investors. In Q2, rug pulls resulted in the loss of $103 million.
The decline in crypto losses in Q2 2023 is a positive sign for the industry. However, it is important to remember that the crypto market is still young and volatile. Investors should always be aware of the risks involved before investing in crypto.
Here are some additional details from the report:
- The average hack size in Q2 2023 was $1 million, down from $1.7 million in Q1 2023.
- The most common type of hack in Q2 2023 was a rug pull, which is when a crypto project abandons its project and steals investors' funds. Rug pulls accounted for 43% of all hacks in Q2 2023.
- The DeFi sector was the most affected by hacks in Q2 2023, with DeFi projects accounting for 60% of all hacks.
- The vast majority of hacks in Q2 2023 were preventable. The report found that only 10% of hacks were caused by new or unknown vulnerabilities.
The report concluded by urging crypto users to be aware of the security risks associated with cryptocurrencies and to take steps to protect their assets. These steps include using strong passwords, enabling two-factor authentication, and only investing in projects that have been vetted by security experts.
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