Crypto Hacks, Scams Totaled Over Half-A-Billion Dollars For Q2, 2024: Report

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by Tyler Durden
Wednesday, Jul 03, 2024 - 09:00 AM

Authored by Naveen Athrappully via The Epoch Times (emphasis ours),

Over half a billion dollars worth of cryptocurrency was stolen in the second quarter this year through hacks and scams, with two incidents making up the bulk of the stolen funds, according to a recent report by bug bounty platform Immunefi.

A Bitcion mock-up on Jan. 12; 2022. (John Fredricks/The Epoch Times)

Crypto losses in Q2, 2024, totaled more than $572 million, the June report said. Over $564 million in losses were accounted for by 53 hacking incidents and the remaining $8.45 million by 19 fraud incidents. Hacking was responsible for 98.5 percent of losses, with fraud making up 1.5 percent. Two major hacking incidents in that quarter made up $360 million (62.8 percent) of the total losses.

The first was a May 31 hacking attack against Japanese cryptocurrency platform DMM Bitcoin that led to a loss of around $305 million, while the second was a cyberattack targeting Turkish crypto exchange BtcTurk, on June 23, which resulted in $55 million worth of funds getting stolen.

More than $920 million in crypto losses were identified—a 24 percent increase compared to the same period last year.

Main targets of the exploits were centralized finance (CeFi) entities. In CeFi, all crypto trades are handled via a central exchange. This stands in contrast to decentralized finance (DeFi) where there is no exchange involved in the trade.

CeFi losses made up 70 percent of the total losses, with DeFi accounting for the remaining 30 percent.

“This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages,” said Immunefi CEO Mitchell Amador.

This was evident during this quarter, where losses surged primarily due to hacks targeting CeFi infrastructure, surpassing DeFi, despite a smaller number of hacks in that sector. Robust measures to safeguard the entirety of the ecosystem are crucial.

According to the U.S. Federal Trade Commission (FTC), payments made via cryptocurrencies “typically are not reversible.” As such, the hacked cryptos may be difficult to recover.

Immunefi data shows that $26.7 million was recovered from four incidents in Q2, representing only 5 percent of total losses. The recovery rate was a slight improvement over the 3.9 percent recovered in Q2, 2023.

An April 2023 poll by Pew Research showed that 17 percent of U.S. adults have invested in, traded, or used a cryptocurrency.

Crypto Hackers

The U.S. Department of Justice has arrested several people in connection with crypto hacking incidents over the past year.

In May, two brothers were arrested for allegedly stealing $25 million worth of cryptocurrency. The duo sought to pull off the heist “through a technologically sophisticated, cutting-edge scheme they plotted for months and executed in seconds,” said Deputy Attorney General Lisa Monaco.

They are accused of manipulating and tampering with the processes used to validate transactions on the Ethereum blockchain. This allegedly allowed them to gain access to certain pending transactions and eventually steal people’s cryptocurrency.

In April, Shakeeb Ahmed, a former security engineer at a tech firm, was sentenced to three years in prison for hacking two decentralized crypto exchanges and stealing more than $12 million in cryptocurrency.

In one incident, he attacked crypto exchange Nirvana Finance and stole $3.6 million in funds. The theft represented almost all the funds owned by the company. As a result, Nirvana was forced to shut down.

Meanwhile, crypto fraud is also causing major losses to ordinary citizens. According to the FTC, Americans reported losing over $10 billion to fraud last year. Consumers said they lost more money to fraudulent bank transfers and cryptocurrencies than all other methods combined.

“Digital tools are making it easier than ever to target hard-working Americans, and we see the effects of that in the data we’re releasing today,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.

The FTC is working hard to take action against those scams,” he added.

According to a 2023 report by the Institute for Marketplace Trust, investment/cryptocurrency scams topped the list of “riskiest scams” last year. Over 80 percent of victims of these scams reported a monetary loss.