De.Fi Reports $2 Billion Crypto Scams in 2023: Here’s the Good, Bad, and the Ugly

In its latest annual report, De.Fi, a premier security application provider, highlighted that the cryptocurrency industry saw losses close to $2 billion in 2023. However, there’s a notable improvement: this amount is down from the $4.2 billion lost in 2022. This trend suggests that while the industry faces persistent security challenges, there are encouraging signs of resilience.

Read on for more insights that are crucial for any wise investor or trader.

Understanding the Decline & Losses

Several factors contributed to this decrease in losses. Improved security protocols were instrumental. Additionally, a more vigilant crypto community and reduced market activity also played roles. Nevertheless, the report doesn’t gloss over the significant $40 billion in losses linked to major entities like Terraform Labs, Celsius, and the FTX exchange.

The industry’s downturn, especially for alternative tokens, also aligns with this trend.

Ethereum’s Vulnerability Exposed?

Ethereum, a leading blockchain platform, experienced substantial losses, with around $1.35 billion taken in nearly 170 incidents. The report emphasizes that Ethereum’s extensive ecosystem and high-profile projects make it a prime target for malicious actors. A notable example is the $230 million breach of the cross-chain platform, Multichain, in July.

Other platforms were affected too!

The BNB Chain reported losses of $110.12 million across 213 incidents. Additionally, zkSync Era and Solana faced losses of $5.2 million and $1 million, respectively.

Centralized platforms, such as exchanges, reported significant losses of about $256 million in seven notable incidents. A key event was the November breach at Poloniex, owned by Justin Sun, resulting in a $122 million loss.

Key Exploitation Methods

The report identifies prevalent exploitation methods. Access control breaches were the most costly, resulting in over $852 million in losses across 29 cases. These breaches exploit vulnerabilities in smart contracts or platform access. Flash-loan attacks and exit scams also caused significant damages, accounting for $275 million across 36 cases and $136 million in 263 incidents, respectively.

De.Fi’s report offers a comprehensive overview of the 2023 crypto landscape, emphasizing the industry’s ongoing efforts to combat security threats. While progress has been made, the evolving nature of these threats underscores the importance of continuous vigilance and proactive measures. Highlighted by Coinpedia’s yearly crypto hack report, this analysis provides invaluable insights for prioritizing security in decentralized finance and guiding future enhancements.