With the increasing number of web3 technologies taking up the market, fraudsters and hackers have also taken up the opportunity to exploit this. The latest study by Immunefi has monitored the first quarter of 2024 cryptocurrency losses and revealed the crypto sector’s growth pattern as well as alarming directions.
Overview of losses
The $100 billion in funds was locked in web3 protocols as of March 2024 providing a strong enough motive for black hat hackers. Immunefi’s analysis shows that the crypto industry lost $336,311,217 in Q1 2024.
Its significant 23.1% drop compared to the same period in the previous year intimates us that the security measures are beginning to work but also there exists the underlying problem of vulnerabilities.
Major exploits and losses
One of the most eminent losses was those from two particular hacks, OrbitBridge and Munchables, which together accounted for $144,480,000, roughly 43% of the total losses in Q1 2024. Orbit Bridge, which is the bridging protocol of the Orbit Chain cross-chain project was exploited on the 1st of January, 2024 in an $81 million attack.
On the other hand, Munchables, an NFT game on the Ethereum layer 2 system called Blast was exploited on the 26th of March losing full access to its contract that enabled the withdrawal of the game’s assets worth a staggering $62M.
Hacking remains a trend
Further, the report probed into the hacks/fraud phenomena, and the fact emerged therefrom that hacks remained the dominant cause of losses, contributing 95.6% of the overall losses with 4.4% of losses arising from fraud. Of particular note, all of the vulnerabilities were in DeFi and none of them were from Cefi.
Ethereum once again dominates
From the perspective of the blockchains that have suffered security breaches, Ethereum occupies the top position, with 33 incidents, accounting for 51% of total losses for all the networks. BNB Chain was in the second position at the time of these incidents with 14 cases, compromising 22% of the losses. Out of all the exploits Arbitrum had, according to this analysis, 6 incidents accounted for a 9.2% loss.
Despite the huge losses, several cases have successfully got back stolen funds amounting to $73,885,000 in seven cases. This number, which represents 22 percent of the total losses in Q1 2024, highlights the necessity for rapid and coordinated measures to prevent security breaches.
Looking ahead
Although overall losses have been observed to decline, one can argue that the security level has not significantly risen overcoming the threat of private key stealing among others. In the process of shaping the crypto arena, it becomes imperative for key market players to stay vigilant and proactive to reinforce security when possible.
