Cryptocurrency Industry Faces Security Crisis
In July 2024, the cryptocurrency industry experienced a significant security crisis, with hackers carrying out 16 major breaches that resulted in the theft of approximately $266 million in assets. This marked a worrying trend, as the number of cases in July exceeded that of the previous month, with total losses surpassing June’s $176 million.
Major Breaches and Victims
One of the most notable attacks took place on July 18th, when Indian cryptocurrency exchange WazirX fell victim to a breach, leading to losses exceeding $230 million, accounting for 86.4% of the total losses in that month. Investigations suggest the involvement of North Korean cybercriminals in this significant hacking incident.
Other notable breaches in July included Compound Finance with a loss of $24 million, Li.Fi with a loss of $10 million, Bittensor with a loss of $8 million, and Rho Markets also with a loss of $8 million. Many of the stolen assets were transferred through the use of the cryptocurrency mixer Tornado Cash, a common tactic used by hackers to disguise the origin of stolen funds.
Terra Blockchain Security Incident
At the end of July, the Terra blockchain suffered a major security incident as hackers exploited known vulnerabilities, resulting in the theft of 60 million ASTRO tokens, $500,000, $3.5 million in coins, and 2.7 Bitcoins, amounting to a total loss of $6 million. This forced Terra to temporarily halt operations, implement an emergency chain upgrade, and resume block production on the same day.
Deddy Lavid, CEO of Web3 security company Cyvers, highlighted the changing nature of hacker targets in 2024, with centralized finance entities becoming prime targets. The uptick in attacks on smart contract-based projects is attributed to coding flaws and personal negligence.
Record Recovery Rates Amid Ongoing Threat
Despite the rise in hacks and scams, the crypto market has demonstrated resilience. In the second quarter of 2024, the recovery rate of stolen funds reached a record 77%, with $347.4 million out of the $512.9 million lost to theft successfully recovered or frozen.
While the recovery rates provide a glimmer of hope, the threat of cryptocurrency scams persists. Platforms like X (formerly Twitter) continue to be hotspots for fraudulent activity, with account impersonation leading to nearly $50 million in losses monthly. As such, there is a pressing need for enhanced security measures and heightened vigilance within the industry to combat the surge in cryptocurrency thefts.
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