Crypto Hacks Surge in Third Quarter, with $409 Million Stolen
A report by Immunefi revealed that hackers stole $409 million worth of cryptocurrency in the third quarter, which is 40% less than in the year-earlier period. This figure also includes an additional $3 million lost to fraud. The majority of stolen funds can be attributed to the hacks of WazirX and BingX, with $235 million and $52 million being stolen respectively.
DeFi Remains a Lucrative Opportunity for Blackhat Hackers
Immunefi stated that DeFi remains an unparalleled opportunity for blackhat hackers. With the total value locked (TVL) across DeFi protocols standing at $87.2 billion, according to DefiLlama, this vast amount of capital represents an attractive target for malicious actors. Mitchell Amador, founder and CEO of ImmuneFi, noted that "We’re seeing a higher number of incidents targeting DeFi, while CeFi experiences fewer incidents but often with more severe consequences, with hundreds of millions in stolen funds in a single exploit."
Hacks of Crypto Exchanges Account for Majority of Losses
Most of the quarter’s losses came from hacks of crypto exchanges. WazirX, an Indian exchange, lost $235 million after hackers compromised the exchange’s private keys. The exchange halted withdrawals and froze trading on July 18 and is now seeking a moratorium from Singapore’s court to give it time to restructure. BingX, a Singapore-based exchange, suffered losses of $52 million.
Ethereum Blockchain Suffers Most Incidents
The Ethereum blockchain was the most common target for hackers, with 15 incidents of theft reported compared with eight on BNB Chain and two on Base. Ronin Network recouped $10 million from a $12 million hack and ShezmuTech clawed back all $4.9 million that was taken.
Private Key Management Remains a Major Concern
Mitchell Amador emphasized the importance of private key management in maintaining self-custody of crypto assets, stating that "it requires rigorous key management policies, practices, and emergency plans." CeFi exchanges often struggle with this issue, making them vulnerable to severe consequences.
Lessons Learned from Recent Hacks
The recent hacks highlight the need for improved security measures and incident response plans. Immunefi’s report serves as a reminder that DeFi and crypto exchanges must prioritize cybersecurity and risk management to protect against malicious actors.
Conclusion
The surge in crypto hacks during the third quarter underscores the importance of prioritizing security measures and incident response planning. With DeFi remaining an attractive target for blackhat hackers, it is essential for exchanges and protocols to take proactive steps to prevent and mitigate attacks. By learning from recent incidents, stakeholders can work towards creating a safer and more secure cryptocurrency ecosystem.