Cryptocurrency markets are still at risk from hacks, fraud, and big losses. This week’s reports of hacks show that many platforms have security weaknesses. These problems also raise concerns about rules and safety in the industry.
The DEXX trading platform, aimed at trading in meme coins, was hacked on November 16th. The attack emerged due to a private key leak to steal more than 8,620 Solana wallets and siphon $30m. In the same case, at least 900 users were affected out of which one person lost more than one million dollars.
However, the platform has engaged in mitigation measures like; tracking the hacker’s wallets and negotiating for the funds’ return, yet the outcome is often unpredictable.
Pump Science, a Solana-based decentralised science (DeSci) platform, shared news about the breach, which resulted from the recklessness of one of its developers. The attacker used a leaked private key to mint fake URO and RIF tokens into the system voluntarily. The fake tokens circulated into the market erasing the reputation and trust of the project.
Pump Science has since explained that any tokens produced by the said wallet since its compromise are fake. The team has also warned users to stay away from fake accounts while trying to contain the losses made so far.
A popular YouTuber MrBeast (Jimmy Donaldson) misused his 31.2M subscribers by using forums to promote pump-and-dump schemes. Researchers claim that he manipulated token prices using his status to gain control over them to pump the prices and dump them for a $23 million profit.
Key projects tied to these allegations include: $SUPER: $11.45M, $ERN: $4.65M, $PMON: $1.72M, $STAK: $1.31M and $AIOZ: $1M
This has again caused many people to ponder on the kind of ethical practices there are in crypto marketing.
Analyzed by ImmuneFi, 26 hacking and fraud cases in November led to $71 million in losses. This has reduced by 79% from that recorded in November 2023 when $343 million was drained from the accounts. However, challenges persist, particularly for DeFi platforms, which accounted for: 100% of incidents and losses, $70.99M from 24 hacks and $25,300 from 2 rug pulls
Major incidents included: Thala Labs: $25.5M and DEXX: $21M
The BNB Chain was the most attacked blockchain with 14 attacks and a total loss worth 46.7%; Ethereum received a 30% loss.
This week’s events show that there’s a need to attend to security loopholes and other malpractices taking place in the crypto industry. Although the total amount of losses has gone down compared to last year, cases such as DEXX and Pump Science clearly indicate the importance of hard technical security measures.
In the same way, MrBeast’s case suggests that the FCA should pay more attention to the financial promotions of influencers.
Looking ahead to the last quarter of 2024, the key to change and growth of the crypto community is trust, transparency and security to make the ecosystem stronger in 2025.
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