Rising Cryptocurrency Hacks Lead to $266 Million in Losses
In July 2024, the cryptocurrency industry experienced a significant security crisis, as hackers carried out 16 major breaches, resulting in the theft of approximately $266 million in assets. This uptick in thefts signals a troubling trend, with 20 cases in July surpassing the losses seen in June, which amounted to $176 million.
Impactful Breaches and Affected Entities
One of the most notable breaches occurred on July 18th when Indian cryptocurrency exchange WazirX fell victim to a breach, leading to losses exceeding $230 million, representing 86.4% of the total losses for that month. Investigations point to North Korean cybercriminals as potential orchestrators of this massive hack.
Other significant casualties in July included Compound Finance ($24 million loss), bridging protocol Li.Fi ($10 million loss), decentralized artificial intelligence protocol Bittensor, and liquidity provider Rho Markets (both with $8 million losses).
The Terra Blockchain Incident and Recovery Efforts
At the close of July, the Terra blockchain faced a substantial security breach. Exploiting known vulnerabilities, hackers made off with 60 million ASTRO tokens, $500,000, $3.5 million in coins, and 2.7 Bitcoins amounting to a $6 million loss. Following the attack, Terra temporarily suspended operations at block height 11430400.
Swift responses from developers included an emergency chain upgrade, enabling the resumption of block production on the same day. Notably, validators holding over 67% of the voting power have updated their nodes to prevent future vulnerabilities, signaling a united front against potential threats.
Deddy Lavid, co-founder and CEO of Web3 security firm Cyvers, cautioned about the evolving hacker targets in 2024, citing centralized finance entities and smart contract-based projects as prime targets due to coding errors and human oversight.
Despite the surge in hacking incidents, the recovery rate of stolen funds reached a record 77% in the second quarter of 2024, as per Hacken’s Q2 2024 Web3 Security Report. Out of the $512.9 million lost to theft, $347.4 million has been successfully recovered or frozen, offering a glimmer of hope amidst alarming theft rates.
Nevertheless, the prevalence of cryptocurrency scams persists, with platforms like X (formerly Twitter) serving as hotspots for fraudulent activities. Alarmingly, web3 anti-fraud company Scam Sniffer disclosed that nearly $50 million is lost monthly due to account impersonation on the platform.
The recent spike in cryptocurrency theft emphasizes the critical need for enhanced security measures and vigilance within the industry.
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