How Fall Down Crypto Hacks Drop In 2023

Cybercriminals continue to aggressively exploit blockchain technology and initiate fraud, despite the cryptocurrency industry currently undergoing a significant market correction. In the third quarter of 2022, hackers managed to steal a total of approximately $483 million, although the number of blockchain hacks in the last quarter decreased by 43% compared to the second quarter. The total amount of money lost by blockchain hackers in the three quarters amounted to $2,570,117,825.
Notably, the amount of money lost by blockchain hackers decreases quarter by quarter, from over $1.3 billion in the first quarter of 2022 to $810 million in the second quarter of 2022. Overall losses decreased by 40% in the third quarter, totaling $483 million.

In the third quarter of 2022, there were 55 blockchain hacks compared to 96 in the second quarter. Data for the third quarter of 2021 shows a 28% decrease in blockchain incidents compared to the same quarter of this year. If the cryptocurrency market continues to decline, it is likely that the fourth quarter will see a similar number of hacks as the third. However, for the years 2021 and 2022, the number of blockchain hacks increased by 39%, rising from 166 cases in 2021 to 230 in 2022.

Statistics of Hacks for the 1st Quarter of 2023

Attacks and hacks on key protocols decreased by 70% in the first quarter of 2023 compared to the same period in 2022.
Attacks on token protocols and crypto projects dropped by a staggering 70% in the first quarter of 2023 compared to the same period last year, when greed and valuations were rampant.
The stolen amount in the first three months of this year was lower than in any other quarter of 2022, indicating more effective security measures and suggesting an overall decrease in the number of simple exploits. The average hack size also decreased in the first quarter of 2023 to $10.5 million from nearly $30 million in the same quarter of 2022, although the number of incidents was similar (around 40).

“Victims of hacks have recovered more than half of all stolen funds in the first quarter of 2023,” the company added. “For example, in March 2023, a hacker exploited a vulnerability in Tender.fi’s code, which allowed the attacker to steal over $1.5 million. Later, the hacker contacted Tender.fi and agreed to return the funds in exchange for a bug bounty of 62.15 Ether worth $850,000.”

The cryptocurrency ecosystem has long been a target for hackers due to its inherent vulnerabilities. However, the reduction in cryptocurrency hacks in the first quarter of 2023 indicates that the industry is actively addressing these issues and implementing proactive security measures.

Top 5 Secure Exchanges According to Coincap That You Can Use Today:

Binance

Founded in 2017 by Changpeng Zhao, Binance quickly became a leading cryptocurrency exchange and has its own crypto called Binance Coin. Binance offers users ways to purchase crypto assets directly using fiat currencies or a credit card. Binance can be accessed through its website, desktop, or mobile app.

Coinbase Pro

Founded in 2015 and known initially as GDAX, Coinbase Pro is one of the biggest and most reputable cryptocurrency exchanges offering its services worldwide. The platform supports a wide range of crypto assets and allows clients to exchange more than 80 different pairs.

HitBTC

One of the oldest platforms for trading digital assets. It was established in 2013 in the United Kingdom. As of 2021, the central office of the cryptocurrency exchange is located in Chile. The platform offers clients trading with over 500 assets, primarily cryptocurrency pairs. The platform provides a Robot-Friendly API that can be used for application development.

WhiteBIT

WhiteBIT is one of the largest European cryptocurrency exchanges in the market. WhiteBIT was founded in Ukraine in 2018 and has since attracted over 4 million users to the platform. It’s also the official crypto exchange of FC Barcelona, one of the most popular football clubs in the world. Apart from the fairly wide crypto selection, WhiteBIT also offers their own WhiteBIT Token (WBT) that provides users with multiple benefits, and their WhiteBIT Earn program.

Kucoin

It is the relatively new cryptocurrency exchange that has quickly developed a fervent fan base thanks to its intuitive design and high level of security. The exchange is highly regarded for its large number of different cryptocurrencies pairs, which means users can purchase a wide variety of cryptos. It’s sometimes referred to as “The People’s Exchange” and has a stellar reputation in the cryptocurrency community.

In last year, as a result of various attacks, hacks, and fraud, over $3.7 billion was lost, making 2022 the worst year in the history of the market. Criminals made over $3.2 billion in 2021. However, 2022 was even more challenging: the exploit of the popular cross-chain service Wormhole worth $325 million, followed by an attack on Axie Infinity’s Ronin bridge worth $625 million, and then a $200 million exploit of the Nomad bridge.

The decrease in cryptocurrency hacks this year may be attributed to various factors, including improved cybersecurity methods, stricter regulations, and increased collaboration among industry participants. However, reasons for concern still remain. A portion of the stolen funds from crypto platforms and users are attributed to a few large-scale attacks, resulting in the overall stolen amount fluctuating sharply from month to month.

Will the Duration of this trend be Long-lasting?

Hackers withdrew $400 million worth of cryptocurrencies through 40 hacks in the first three months of 2023. The amount of stolen funds in the first quarter of 2023 decreased by 70%, and the average hack size dropped to $10.5 million from the annual calculation of $30 million. In comparison, hackers stole $4 billion in 2022.

The implementation of anti-money laundering standards by virtual asset service providers, increased efforts by law enforcement and regulatory agencies to prosecute criminals, and the growing complexity of blockchain surveillance tools may have contributed to the decrease in hack incidents. However, it is unlikely that this trend will be sustained.

According to some sources, this slowdown is “likely a temporary respite rather than a long-term trend.”

“A few” large-scale attacks can lead to a sharp change in the overall stolen amount. Only 10 hacks in 2022 accounted for 75% of the total amount stolen for the year. The company stated that quarterly data also presents “bleak forecasts” for the annual trend. Figures for the first quarter of 2023 reflect the metrics of the third quarter of 2022. Hacks in the fourth quarter of 2022 made it a record-breaking year for cryptocurrency hacks.

“It’s hard to say if the downward trend will continue. One or two large-scale attacks like Ronin, and we’ll be back to the 2022 figures,” said Redboard, who is also an ISMG participant.

Law, enforcement agencies are leveraging blockchain traceability and immutability to track illicit transactions and adding more friction to the money laundering process, he added. “As tools and education become better and more widespread, this trend is likely to persist.”
Even if an illegitimate transaction is detected, cryptocurrency owners cannot approach an arbitrator and freeze it as in the fiat world. So, how can one avoid becoming a victim of cyber fraud? To minimize the majority of risks associated with theft, investors need to adhere to simple rules of digital (or cyber) hygiene. Before diving into the rules, let’s consider the methods of stealing investors’ funds. They can be roughly divided into two main categories: technical and social engineering (“hacking” humans using psychological approaches).
Technically, cybercriminals can gain access to your device and redirect you to a fake copy of a project’s website. As a result, you will transfer your crypto assets not to the project’s wallet but to the scammer’s wallet. Moreover, when they have access to your devices, black-hat hackers can reach your crypto wallets by intercepting private keys and/or passwords, as well as substituting recipient wallet addresses during transactions.

Here are 10 golden rules for your digital security:

1. Always install operating system updates, firmware updates, and updates for all existing programs.

2. Enable two-factor authentication wherever possible to access your assets.

3. Install protective software (antivirus).

4. Install a minimal number of third-party applications on the device used for cryptocurrency transactions.

5. Avoid using public Wi-Fi networks for cryptocurrency transactions. Always strive to use VPN connections, not for anonymity, but for encrypting connections and protecting traffic.

6. Double-check the link address entered the address bar, or better yet, manually enter the project’s address.

7. Verify the wallet address to which you are making a transaction.

8. When installing necessary software, download the installer from the official website and verify the file checksum. Do not install programs received via email, messengers, or from unofficial websites.

9. Do not share private keys to wallets with large sums, and even on a cryptocurrency exchange, keep a separate wallet with the minimum necessary funds.

10. Also, do not share your passwords for hot wallets, and never reuse passwords for important resources.

By following these rules, you can minimize the majority of risks associated with the theft of investors’ funds.