The cryptocurrency and decentralized finance (DeFi) sectors suffered a whopping $1.19 billion in losses in the first half of 2024 due to hacks, scams, and exploits, according to a new report from blockchain security firm CertiK.
Cryptocurrency Security Issues Worsen: First Half Losses Reach $1.19 Billion
“Hack3d: The Web3 Security Quarterly Report” for Q2 and H1 2024, released this week, paints a sobering picture of the crypto industry’s current security challenges. Phishing attacks were the most damaging vector, accounting for $497.7 million in losses across 150 incidents.
“The second quarter of 2024 saw the biggest losses since the third quarter of the previous year, despite a relatively quiet quarter in which markets largely consolidated first-quarter gains,” the report, emailed to Finance Magnates, said.
Compromise of private keys was the second most costly type of attack, resulting in $408.9 million in losses across 42 major incidents. The Ethereum blockchain bore the brunt of the attacks, suffering 235 security incidents that resulted in losses of nearly $400 million.
The biggest incident of this period was the attack on Japanese exchange DMM Bitcoin, which resulted in a whopping $304.7 million in losses. Other notable breaches included Chris Larsen’s $112.5 million loss and the $90 million hack of Turkish exchange BtcTurk.
Despite the overall increase in losses, there is a silver lining: in the first half of the year, approximately US$177.8 million was recovered from victims of 18 separate incidents, reducing net losses for the period to US$1.01 billion.
Hack3d: Q2 + H1 2024 🧵
184 breaches, scams, and exploits resulted in $688,102,941 in lost value from Web3 in Q2 2024. This is a 37% increase in lost value compared to Q1 2024, despite an 18% decrease in incidents.
Read our full report: https://t.co/XnuddaEecn pic.twitter.com/GGHdbqWZoz
— CertiK (@CertiK) July 3, 2024
By comparison, investors and exchanges are estimated to have lost $2 billion in cryptocurrency over the course of 2023. While alarming, these figures are still less than half the record-breaking 2022, when losses reached nearly $4 billion.
Cryptocurrency Losses Rise to $688 Million in Q2 2024
The report also provided a breakdown of the figures for the second quarter of 2024, which revealed a worrying trend:
- In the second quarter alone, total losses of $688.1 million were reported as a result of 184 network security incidents, up 37% from the first quarter of 2024. This is also significantly higher than the $300 million reported in the second quarter of the previous year.
- Phishing remained the dominant attack vector in Q2, with 67 incidents causing $433.7 million in damages.
- Ethereum remained the most attacked chain in Q2, with 83 incidents resulting in losses of $170.6 million.
“Overall, Q2 2024 was marked by significant financial losses due to security breaches, highlighting ongoing challenges in the crypto and DeFi sectors. Phishing attacks and code vulnerabilities remain prevalent, with significant losses affecting both individual users and large platforms,” the report adds.
The persistent security issues uncovered by CertiK’s research could pose a challenge for platforms seeking to demonstrate the reliability and security of their systems, especially as the industry faces increased regulatory scrutiny and struggles to attract institutional investors.
