Immunefi Report Shows Losses from Crypto Hacks Declined in Q1 of 2024

Immunefi Report Shows Crypto Hacks Declined in Q1 of 2024

In a March 28 report, the famous blockchain security firm Immunefi observed a drastic drop in the number of crypto hacks. Compared to 2023, Immunefi noted a 23% drop in crypto scams and hacks in Q1 of 2024.

In the research, the Immunefi team observed that the total amount lost to hack and fraudulent schemes amounted to $336.3 million in Q1 of 2024. The blockchain security firm noted that the hack incident dropped from $437.5 million in Q1 of 2023.

Immunefi Observes Drop in Crypto Crimes

A review of the Immunefi report demonstrated that around 46 hacking incidents and 15 fraud cases were reported this year. The blockchain firm noted that the criminals have shifted their focus to Web3 and decentralized finance (DeFi) projects.

Compared to the losses on centralized finance platforms, Immunefi observed that most of the hacks and scams  targeted  Web3 and DeFi platforms. In the report, the Immunefi team noted that the criminals escaped with multi-million dollars in two scam cases.

They regretted that the Orbit bridge exploit was one of the largest attacks conducted early this year. During the Orbit attack, the criminals drained assets worth $81.7 million. Subsequently, the hackers siphoned nearly $133 million in January.

A statement from the chief executive of Immunefi, Mitchell Amador, argued that the hackers have been targeting the exploitation of private keys to gain unauthorized access to DeFi platforms.

Factors Contributing to Reduced Crypto Crimes

Based on the huge losses suffered from exploits, the CEO advised the DeFi projects to invest in improving the security protocol of these platforms. In the report, the Immunefi team revisited the major exploit that occurred in Q1 of this year.

The research team noted that the second largest attack involved the Munchables exploit that impacted a loss of $62 million. Even though the funds were partially recovered, the Munchables managed to restore the stolen private keys from the hackers. Other firms that suffered from the malicious exploits managed to recover approximately 22% of the stolen funds.

The report indicates that the number of crypto scams and hacks dropped from 74 in 2023 to 61 in Q1 of 2024. The Immunefi estimated that around $321.6 million was lost in 46 crypto hack incidents, while $14.7 million was lost in 15 scams and rug pull incidents.

Additionally, the Immunefi team examined the blockchain network that hackers targeted mostly to conduct their illicit activities. They noted that the hackers were preying on Ethereum and BNB Chains.

Criminals Target to Exploit DeFi and Blockchain Projects

The report indicates that the Ethereum and BNB chains lost around 73% of the $25,000. The researchers noted that Ethereum accounted for most of the scams, followed by BNB Chains. Other blockchain networks that suffered huge financial losses from malicious exploits included Arbitrum, Polygon, Base, Conflux, Solana, and Optimism, among others.

The Immunefi report on the decline in hack incidents mirrors the TRM Labs report that demonstrated that illicit activities in the crypto sector dropped from 2023. The TRM report titled “The Illicit Crypto Economy” indicated that the illicit activities in the digital sector dropped by 9% between 2022 and 2023.

The researchers discovered that crypto assets worth $35 billion were recovered from the illicit activities. In 2023, the blockchain security firm observed scams and fraud accounted for two-thirds of the financial crimes.

The TRM team noted that the ongoing regulatory pressure to entirely regulate the crypto sector greatly contributed to the decrease in crimes. The researchers noted that the imposed restrictions on crypto activities and sanctions reduced financial crimes.

Citing the damages caused by the North Korean hackers Lazarus Group, the TRM team observed that the enactment of the Western sanctions reduced crypto crimes by 30% in 2023.

The report demonstrated that the enforcement action taken by the global regulators contributed to reduced hack incidents. Compared to 2022, the TRM noted that the enactment of stringent rules reduced the sale of fentanyl by nearly 150% in 2023.

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