- The number of crypto attacks surged 192% YoY in Q1 2023, while the total amount lost dropped by 64.4%.
- The BNB Chain emerged as the prime target for exploits and scams, with 73.3% of all rug pulls occurring on the platform.
- Black hat hackers have kept pace with industry growth, adapting and improving their skills to successfully execute more hacks.
The cryptocurrency industry has experienced a significant increase in hacks and scams in recent months. According to a report from Immunefi, the number of attacks surged 192% year-over-year, from 25 to 73 in the past quarter. However, despite this alarming rise, the total amount of money lost in these incidents has dropped by 64.4%.
This decline in losses is likely due to the current market conditions, but the rise in incidents remains a cause for concern.
The BNB Chain Emerges as the Prime Target
Immunefi’s research revealed that the BNB Chain had become the prime target for exploits and scams, with 73.3% of all rug pulls surveyed occurring on this particular blockchain. A rug pull is an instance where a project raises funds, for example, for a new token or NFT collection, promising certain benefits to users. However, the developers abandoned the project without delivering the promised benefits and retaining the buyers’ funds.
Adrian Hetman, Tech Lead of the Triaging Team at Immunefi, explained that the BNB Chain’s community needs a security-first approach and attracts many users looking for a quick way to earn money. This is why the BNB Chain continues to see the highest number of exploits and rug pulls in the ecosystem.
Black Hat Hackers Keep Pace with Industry Growth
Hacks were responsible for 95.7% of the total losses in Q1 2023, while frauds, scams, and rug pull accounted for only 4.3%. Although projects have increased their security measures through audits and bug bounties, black hat hackers have kept up with the industry’s growth. Immunefi’s spokesperson told Decrypt via email that these hackers have been educating themselves on industry practices and improving their skills, leading to a spike in the number of successful hacks and rug pulls.
In a bear market, black hat hackers can take advantage of projects that start deprioritizing security in favor of other budget items. The developers have to be right in every step of the development process to ensure there isn’t a single hole, while black hats only need to be right once in their attack. This creates an almost unfair fight in the battle for security.
Euler Finance Recovers Exploited Funds
Despite the significant increase in crypto attacks, the industry has seen some positive news. Euler Finance, a DeFi lending platform that suffered a flash loan exploit, recently announced that the hackers responsible for the nearly $200 million attack had returned all the recoverable funds. This recovery, along with the return of funds from the SperaxUSD exploit, accounted for 40.5% of the total amount stolen in Q1 2023.
The cryptocurrency industry must remain vigilant and prioritize security measures to combat the growing threat of hacks and scams. While the total amount lost has decreased, the rising number of incidents highlights the need for a stronger focus on securing the rapidly evolving crypto landscape.
