- Year-to-date (YTD), the sector has lost over a Billion dollars to crypto hacks and frauds.
- Ethereum, BNB Chain, and BASE represent over 60% of losses.
Crypto losses are down by over 90% in August 2023. Software company Immunifi’s multifaceted report on crypto hacks and frauds gathered publicly available data to jot the figures. Besides, decentralized finance (DeFi) was again on the bad actors’ radar, while centralized finance (CeFi) remained immune.
Crypto Hacks Dominate August 2023 Losses
According to the report, the crypto market lost nearly $320 Million to malicious actors in July 2023. However, the figure appears to fall into limbo in August, reaching around $23 Million. Year-to-date (YTD), the sector has lost over a Billion dollars to crypto hacks and frauds.
While crypto hacks make up for 67.7% of the losses, crypto frauds account for 32.3%. Nevertheless, the former segment experienced an average of $1.2 Million per loss per head, the latter $1.8 Million. Altogether, 17 incidents occurred during the month.
Leading blockchains, Ethereum and BNB Chain, account for 9 incidents. Additionally, Coinbase’s BASE protocol was not immune to the battering either. Together, the three protocols represent 62% losses during the period. Other chains exploited during the month include Solana, Avalanche, Arbitrum, and more.
CertiK, a security-focused company, confirmed in their research that the crypto sector lost $48.5 Million to exploits, hacks, and scams. Pepecoin-related exit scam, which siphoned over $13 Million worth of assets, made to top of their list. Additionally, the report includes flash loan attacks responsible for almost $6 Million in losses.
“Ban, Contain, And Regulate” Could Mitigate Risks
As a burgeoning market, crypto projects attract users to profit from their investment in the sector. Recently, an Israeli business tycoon, Moshe Hogeg, was arrested on charges of financial misconduct according to Times of Israel, the nation’s multi-language online newspaper.
In a recent public filing, the Federal Bureau of Investigation (FBI), a United States intelligence service, revealed it has seized $2 Million worth of crypto assets. Agency’s forfeitures are designed to break the financial backbone of organized crime.
Recently, news agency CNBC reported the sentencing of a Nigerian living in the United Arab Emirates (UAE) for orchestrating a multi-million fraud scheme. The individual worked with a network of scammers tricking users through e-mail phishing and false pretense as corporate entities.
The California Department of Financial Protection and Innovation (DFPI) launched a Crypto Scam Tracker in February. Denizens can raise complaints attributing to crypto hacks or frauds. The website has 89 entries at the time of publication. Furthermore, the platform notes imposter websites as the most commonly reported scams.
Bank of International Settlements (BIS), a foreign exchange company, addressed potential risks related to crypto in January 2023. The document suggests three potential lines of action—ban, contain, and regulate—to mitigate them.
Furthermore, it notes that “Cryptoasset markets have experienced a remarkable series of booms and busts, often resulting in large losses for investors. While these failures have so far not spilled over to the traditional financial system or the real economy, there is no assurance that they will not do so in the future, as DeFi and TradFi become more intertwined.”