During Q1 2024, substantial losses due to hacks amounted to $507 Mn. The trend persisted into Q2, witnessing a 37% surge, setting a new peak at $688 Mn across 184 incidents. Phishing attacks were predominant, resulting in losses exceeding $433.6 Mn across 67 incidents. Private key compromises led to losses of $170 Mn in 16 major incidents. The Ethereum chain bore the brunt with 83 incidents, resulting in a $170 Mn loss.
Breakdown of Hacks by Type
Source – CertikPhishing Attacks Lead Q2’24 with $433.7 Mn Lost in 67 IncidentsPhishing attacks were prevalent during Q2’24, resulting in a substantial loss of $433.7 Mn across 67 incidents. These attacks exploit individuals by deceiving them into revealing their private keys or clicking on malicious links designed to steal crypto funds. They often target newcomers to the crypto space who may lack awareness of scam tactics.
Private Key Compromises Follow Closely with $170.1 Mn Lost in 16 IncidentsQ2’24 also saw significant losses of $170.1 Mn due to private key compromises in 16 incidents. These compromises occur when malicious actors gain access to private keys through malware attacks, compromised exchanges, or user errors such as misplacing keys. Once compromised, the attacker gains unrestricted control over the associated crypto assets.
Top Incidents
Source – CertikDMM BitcoinDMM Bitcoin, a Japanese exchange, fell victim to a hack on May 31, 2024. Hackers managed to steal 4502.9 BTC, valued at approximately $304 Mn. Upon detecting the security breach, the team swiftly responded by implementing measures to prevent further losses. They temporarily suspended services such as account creation and crypto withdrawals. The exchange reassured its users that all Bitcoin deposits would be fully guaranteed, with support from its group companies to refund the lost BTC. Updates on the recovery efforts are pending.BtcTurkBtcTurk, Turkey’s largest crypto exchange, faced a significant cyberattack targeting its hot wallets containing 10 different cryptocurrencies. In response, the exchange promptly halted all deposits and withdrawals to contain the impact. Users were assured that their assets in cold wallets remained secure and unaffected. The attackers transferred substantial amounts of AVAX to Coinbase and THORchain, causing a 10% drop in AVAX's price. Binance is aiding in the investigation and has frozen over $5.3Mn of stolen funds.
Phishing Victim (0x1e22)
Phishing attacks were prominent throughout 2023, accounting for over 48% of total losses despite constituting only 6% of incidents. One notable incident in Q2 2024 involved 0x1e22, which suffered the third-largest hack, resulting in a loss of approximately $68 Mn. The attack exploited a wallet address similarity, leading the victim to mistakenly transfer around 1155.2 wBTC. Surprisingly, the attacker returned the entire amount. Speculation suggests the attacker's IP address was compromised due to a vulnerability in MetaMask’s RPC.LykkeLykke, a UK-based crypto exchange, halted trading on June 6, 2024, following a hack amounting to approximately $23 Mn. Onchain analysts noted suspicious outflows indicating users were unable to withdraw funds. The stolen assets included Bitcoin, Ether, Litecoin, and Bitcoin Cash, with hackers employing conventional laundering methods. While Lykke assured users their funds were secure, specific details have not been disclosed.
Gala GamesGala Games experienced a security breach resulting in the theft of approximately $21 Mn. The incident was attributed to internal control failures that granted unauthorized access to a company administrative wallet. This led to the unauthorized sale of 600 million GALA tokens and the burning of 4.4 billion tokens. Gala Games has partnered with the FBI and DOJ to investigate the breach. This incident occurred amidst ongoing legal disputes between co-founders Eric Schiermeyer and Wright Thurston over alleged misappropriation of company assets.
Losses by Chain
Source – CertikChain-Specific Incidents and LossesEthereum remained the primary target with 83 incidents resulting in losses totaling approximately $170 Mn. However, Bitcoin suffered the most costly single incident, with losses exceeding $304 Mn. BNB chain saw the second-highest number of attacks but incurred a relatively lower loss of around $9.4 Mn. Arbitrum faced 15 incidents resulting in losses of approximately $6 Mn. Other chains such as Solana, Tron, Polygon, and Base also experienced exploits, albeit not on the scale of Ethereum and Bitcoin.
Closing Thoughts
Security remains paramount in the dynamic Web3 landscape. Recent hacks underscore the various tactics employed by attackers, including social engineering and exploiting code vulnerabilities. To mitigate these risks, a collective effort is essential, with projects prioritizing rigorous smart contract audits and secure coding practices. Investors are advised to conduct thorough research, maintain strong passwords, and use secure methods for storing private keys to safeguard their digital assets effectively.
