Q2 Sees Cryptocurrency Sphere Suffer 5727 Million in Losses Due to Frauds and Security Breaches
Crypto losses due to hacks and scams in the second quarter of 2024 reached a staggering $572.7 million across 72 incidents, according to a recent report by Immunefi, a Web3 bug bounty and security services platform. This marks a significant increase of 70.3% from the $336.3 million lost in the first quarter and a staggering 112% rise compared to the $265.5 million stolen in Q2 2023.
Year-to-date, over $900 million has been lost to these illicit activities, representing a 24% increase from the same period last year. The data from Immunefi also reveals a shift in targets, with centralized finance (CeFi) platforms being the primary victims of attacks in Q2. These platforms accounted for 70% ($401.4 million) of the losses, while decentralized finance (DeFi) platforms accounted for 30% ($171.3 million) of the losses. This is a change from Q1, where DeFi platforms were the sole targets of identified exploits.
The two most significant exploits in Q2 contributed significantly to the total losses. Japanese cryptocurrency trading platform DMM Bitcoin lost $305 million, while Turkish crypto exchange BtcTurk lost $55 million on June 23. These two incidents alone accounted for 62.8% of the total losses. The month of May 2024 saw the highest monthly losses in the quarter, totaling $358.5 million.
Mitchell Amador, founder and CEO of Immunefi, emphasized the severity of infrastructure compromises, highlighting how a single compromise can lead to millions in damages. He stressed the importance of robust security measures to protect the entire crypto ecosystem.
The susceptibility of centralized finance platforms to hacks can be attributed to their central repositories and security weaknesses. As these platforms manage substantial asset pools, they have become attractive targets for hackers. Additionally, the growing value of Web3 protocols, particularly Ethereum (ETH), has also drawn the attention of malicious actors seeking easy money.
Hacks accounted for the majority of losses, representing 98.5% ($564.2 million) of the total across 53 incidents. While DeFi platforms have improved their security measures in response to regulatory scrutiny, CeFi entities remain vulnerable to cyberattacks, presenting opportunities for malicious actors.
Fraud, scams, and rug pulls accounted for only 1.5% ($8.5 million) of the losses over 19 incidents. Ethereum and BNB Chain were the most targeted networks, with Ethereum accounting for 44.4% of the exploits, followed by BNB Chain and Arbitrum at 5.6%.
Despite the significant losses, only $26.7 million has been recovered from stolen funds in four specific situations, representing just 5% of the total losses in Q2 2024.
