Security Gains in Cryptocurrency, Yet $2 Billion Lost to Scams and Hacks

<p>In a recent report released by security app De.Fi,
researchers revealed that cryptocurrency users lost nearly $2 billion to scams,
rug pulls, and hacks in 2023. Although this represented a significant reduction
from the previous year, it underscores the ongoing vulnerability of the
industry to security risks.</p><p>Market Decline and Improved Awareness Contribute to Lowered
Crypto Risks</p><p>The decrease in losses is largely attributed to the
implementation of enhanced security protocols, increased awareness within the
community, and an overall decline in market activity. Notably, this reduction
becomes even more substantial when factoring in the $40 billion lost to the
collapses of the stablecoin issuer Terraform Labs, the crypto lender Celsius, and the
FTX exchange.</p><p>This positive trend coincides with a bear market where
major alternative tokens experienced significant slumps before recovering in
recent months amid more bullish conditions. Additionally, the recovery rate of
funds saw a significant improvement, rising to around 10%, up from a mere 2% in
2022, according to De.Fi.</p><p>“This amount, though dispersed across various incidents,
underscores the persistent vulnerabilities and challenges within the DeFi
ecosystem,” De.Fi wrote in its report, which the firm shared with TechCrunch.
“2023 stood as a testament to both the ongoing vulnerabilities and the strides
made in addressing them, even as interest in the space was relatively muted by
the ongoing bear market in the first half of the year.”</p><p>Ethereum, the largest blockchain by active users and value
locked, bore the highest losses, with approximately $1.35 billion erased in an
estimated 170 incidents. This highlights Ethereum's attractiveness to malicious
actors due to its extensive ecosystem and high-profile projects, with the most
substantial exploit being the $230 million attack on the cross-chain platform
Multichain in July.</p><p>BNB Chain also emerged as a target, witnessing a loss of
$110.12 million across 213 incidents. The zkSync Era network lost $5.2 million
in two incidents, while Solana experienced a loss of $1 million in a single
attack.</p><blockquote><p lang="en" dir="ltr">