Crypto Losses Surge by 113% in Q2 2024, Reaching $572 Million

Crypto losses from breaches and scams surged by 113% in Q2 2024, totaling $572 million, reversing a previous downward trend, according to Immunefi.

Crypto Breaches Double in Q2 2024, Centralized Exchanges Hit Hardest with $401M in Losses

According to research conducted by Immunefi (via Cointelegraph), a blockchain security platform, the number of crypto losses resulting from breaches and scams more than doubled in the second quarter of 2024 compared with the same period in the previous year.

Over $572 million was lost in Q2 2023 compared to the $220 million lost in Q2 2023. Most of the losses during the quarter resulted from centralized exchange breaches.

In the first quarter, Immunefi reported a 23% decrease in losses from breaches and scams, which had decreased before the second quarter. This decline persisted throughout April and most of May; however, losses experienced a significant increase in the latter half of May and June.

The most significant singular loss in the second quarter was the theft of $305 million in Bitcoin from the crypto exchange DMM due to the May 31 private key hack.

The BtcTurk breach on June 22 resulted in an additional $55 million in losses. The report indicated that the top two breaches collectively accounted for over 62% of the total losses for the quarter.

Centralized protocols and exchanges incurred approximately $401 million in losses during the quarter, accounting for 70% of the total.

Nevertheless, the proportion of successful assaults against these targets was exceedingly low. Only five attacks against centralized protocols were effective, while 62 incidents of successful exploits or scams involving decentralized protocols were recorded.

Decentralized finance protocols experienced $171 million in losses during the quarter, representing a 25% decline from Q2 2023.

Scammers and hackers continued to target Ethereum and the BNB Smart Chain, which accounted for 71% of the total losses.

Nevertheless, there is evidence that Ethereum layer 2s may be gaining popularity among malicious individuals. Arbitrum was the third most targeted network, with four incidents and losses that accounted for 5.5% of the total. Blast and Optimism each experienced three incidents. The other networks experienced no more than one incident, accounting for 15% of the total losses.

Immunefi Report Highlights Critical Need for Centralized Exchange Security Amidst Surging Crypto Losses

Mitchell Amador, the founder of Immunefi, asserted in the report that this quarter's losses are a stark reminder of the significance of centralized exchange infrastructure security.

“This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages. This was evident during this quarter, where losses surged primarily due to hacks targeting CeFi infrastructure, surpassing DeFi, despite a smaller number of hacks in that sector. Robust measures to safeguard the entirety of the ecosystem are crucial.”

Security researchers recovered some of the funds taken in the second quarter. For instance, the perpetrator exploited the Gala Games protocol and promptly reimbursed nearly all the funds. There were reports that the attacker had connected to his wallet without a virtual private network, which would have exposed his IP address and left him vulnerable to prosecution. However, this was never substantiated.

According to Immunefi, Alex Labs, Bloom, and Yolo Games, most funds lost during their operations were recovered. The report indicated that the recovered funds accounted for 5% of the total loss during the quarter.

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