Crypto losses due to hacks and scams soared in the second quarter of 2024 compared to the same period last year, doubling from $220 million in Q2 2023 to over $572 million this year, as per findings from Immunefi, a blockchain security platform.
The bulk of these losses stemmed from hacks on centralized exchanges. Before Q2, there had been a downward trend in such losses, with a reported 23% decrease in Q1. However, this trend reversed sharply towards the end of May and through June.
The largest single loss in Q2 2024 occurred through the private key hack of crypto exchange DMM on May 31, resulting in the theft of $305 million worth of Bitcoin (BTC). Another significant incident was the BtcTurk hack on June 22, which led to additional losses amounting to $55 million. Together, these two hacks accounted for more than 62% of total losses for the quarter, according to the report.
Centralized protocols and exchanges bore the brunt of the losses, totaling approximately $401 million, constituting 70% of the overall losses. Despite this, the number of successful attacks against these targets remained relatively low, with only five successful attacks against centralized protocols compared to 62 incidents involving decentralized protocols.
Decentralized finance (DeFi) protocols reported losses of $171 million during the quarter, marking a 25% decrease from Q2 2023. Ethereum and BNB Smart Chain remained the top two networks targeted by scammers and hackers, accounting for 71% of the total losses. There was also a noticeable increase in attacks targeting Ethereum layer 2 solutions, with Arbitrum being the third most targeted network.
Regarding recovery efforts, Immunefi noted that some of the funds stolen in Q2 were later recovered by security researchers. For instance, the attacker involved in the Gala Games protocol exploit returned nearly all the funds. Reports suggested the attacker’s IP address was exposed due to a lack of VPN usage, potentially opening them up to legal repercussions.
In reflecting on these events, Immunefi founder Mitchell Amador emphasized the critical importance of bolstering the security of centralized exchange infrastructure.
The data underscores the ongoing challenges and vulnerabilities within the crypto ecosystem, highlighting the ultimate need for robust security measures across all platforms and protocols.