Crypto Hacks Decline In Quarter 1 Is Just Short-Term Suspension

The first quarter of 2023 witnessed a significant decline in crypto hacks compared to the previous year.

However, experts warn that this decrease should be viewed as a brief reprieve rather than a long-term trend. As such, the crypto community should remain vigilant and proactive to prevent future attacks.

Digital Asset Hacks Decline Is Just A Short-Term Relief

According to a recent report by TRM Labs, Outlook confirmed that the amount stolen through crypto hacks in Q1 2023 was lower than any other quarter in 2022.

TRM Labs’ report revealed that the average hack size dropped by nearly 65% compared to the same period in the previous year. 

These figures initially seem promising, indicating a positive shift in the security landscape of the crypto industry.

However, the cybersecurity experts at TRM Labs caution that the current downtrend in hacks is likely temporary and emphasize that the industry must not let its guard down.

They stressed that a few large-scale attacks could tip the scales again, leading to a rebirth of hacking incidents. 

The decreasing trend should not be misinterpreted as a permanent improvement in the overall security of cryptocurrencies.

While the exact reason for the decline in Q1 2023 remains unclear, TRM Labs suggests that certain factors may have played a role.

TRM Labs believes that the U.S. Treasury’s sanctioning of cryptocurrency mixer Tornado Cash and the arrest and charges against Mango Market’s exploiter Avraham Eisenberg may have deterred potential hackers.

Just like TRM Labs, industry experts, including blockchain security firm Certik, also expressed skepticism about a sustained decline in exploits, flash loans, or exit scams.

Meanwhile, a report revealed that approximately $3.8 billion were lost to hackers throughout 2022, which marks the biggest loss in crypto hacking history.

 Notably, the majority of the losses occurred from North Korea-linked attackers and decentralized protocols.

Crypto Hacks In 2023

The digital asset industry has witnessed a series of hacking incidents that have underscored the ongoing threat posed by cybercriminals.

One significant event occurred in April when a prominent crypto exchange, Bitrue, fell victim to a massive hack.

The attackers exploited the exchange’s hot wallet system, gaining unauthorized access to one of the four hot wallets that held 5% of the exchange’s total assets. 

As a result, approximately $23 million worth of Ethereum, Gala, and other cryptocurrencies were stolen.

Another noteworthy attack occurred in April, involving a perplexing hacking spree that targeted crypto whales and early investors.

These individuals collectively lost $10 million from their accounts across 11 different blockchains, with Ethereum being the primary target.

In May, a decentralized finance (DeFi) protocol, Deus Finance, experienced a security breach resulting in over $6 million loss.

The attack initially targeted the stablecoin DEI on the BNB Smart Chain (BSC) before extending to the Arbitrum network. Deployments involving ARB/ETH on Arbitrum suffered losses exceeding $5 million.