The cryptocurrency ecosystem remains riddled with security risks, with the latest mid-year report from cybersecurity firm Cyvers revealing a stunning increase in stolen assets. As of the first half of 2024, the total volume of stolen cryptocurrency was approaching $1.4 billion, indicating a considerable increase as centralized exchanges (CEXs) became prime targets for cyber attacks.
CEXs Lose $600M
Total cryptocurrency losses surpassed $600 million in just the second quarter. This figure indicates a 100% increase over the same period last year, driven mostly by an astounding 900% increase in losses from centralized exchanges, according to Cyvers.
“This quarter has witnessed a significant shift in attack vectors, with centralized exchanges (CEXs) bearing the brunt of major incidents, while decentralized finance (DeFi) protocols show improved resilience,” according to the study. The concentration of assets in centralized platforms, combined with possibly insufficient security measures, has made them an appealing target for hackers.
Phishing Attacks Dominate CEXs
Access control breaches, primarily phishing attempts, accounted for the vast majority of stolen cash in Q2, reaching over $490 million. This surpasses the losses from smart contract exploits, which totaled less than $70 million over the same period. The paper emphasizes the crucial need for improved security measures and user education to combat phishing.
DeFi protocols, on the other hand, have demonstrated an impressive capacity to respond quickly to attacks. Quick action to freeze compromised smart contracts has protected many users, but the risk of exploits remains as hackers uncover new flaws in complicated contracts. Cross-chain bridges remain a prominent attack vector, as evidenced by the $1.44 million XBridge exploit in April.
High-profile breaches
Two high-profile hacks had a significant influence on Cyvers’ second-quarter data. In May, Japanese cryptocurrency exchange DMM experienced a massive hack caused by a compromised private key, resulting in losses of up to $300 million. BtcTurk, a Turkish cryptocurrency exchange, was hacked in June and lost around $50 million. These occurrences highlight the vital necessity for strong security protocols and continuous monitoring.
Despite these hurdles, some progress has been made in recovering stolen monies. According to the research, explicit victims are having more success retrieving lost funds, with overall recoveries climbing by 42% in the second quarter compared to the same period last year. However, the vast majority of lost funds—approximately 76%—are still unrecovered, demonstrating the persistent challenge of preventing cyber theft in the cryptocurrency market.
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