You often hear about the people making money from crypto, getting rich, and living the dream, but you rarely hear about the darker side of trading crypto.
👉 This includes the theft that occurs on a global scale every day in the crypto space, whether through scams, hacks, fraud, or deception.
In the article below, we take a look at the rise of hacks and frauds in the second quarter of 2024.
Immunefi reports on worldwide crypto related hacks and fraud
Popular bug bounty platform Immunefi has found that the global cryptocurrency ecosystem suffered increased hacks and frauds in the second quarter of 2024, losing $572.7 million. According to a recent report, this is a 112% increase compared to the same period last year.
Immunefi noted that the two largest exploits of the year were responsible for 62.8% of all losses in Q2 2024, totalling $360 million. Successful hack attempts were the primary cause of losses in the quarter, accounting for 98.5%. On the other hand, fraud only accounted for 1.5% of the losses.
The amount of money lost to hacks and fraud calls for user caution. All crypto holders and customers of crypto exchanges must pay careful attention to on-chain activity and only interact with trusted platforms.
Believe it or not, this also applies to online casino patrons who want to play anonymously via the best Bitcoin casinos. While anonymity is attractive, users must do extensive due diligence before depositing funds or placing bets at a crypto casino.
Ethereum is the most targeted blockchain
Immunefi’s report also contains several other data points that paint a clearer picture of the crypto ecosystem’s proneness to fund loss. For instance, the report states that successful exploits targeting centralised finance (CeFi) accounted for 70% of the losses, whilst decentralised finance (DeFi) accounted for 30%.
đź‘€ Also, the Ethereum blockchain was the most targeted chain in the quarter, as it was in Q2 last year.
Ethereum witnessed 34 incidents, accounting for 46.6%, whilst BNB was the second, with 18 incidents, representing 24.7%. Both chains accounted for 71% of all losses in the quarter.
Well known victims of crypto hacks and frauds
The two largest victims were Japanese crypto exchange DMM Bitcoin and Turkish exchange BtcTurk, at $305 million and $55 million, respectively.
On 31 May, DMM Bitcoin confirmed that it lost 4,502.9 Bitcoin, describing the incident as “an unauthorised leak of Bitcoin.”
However, the exchange promised to cover the losses with support from the firm’s group of companies. Crypto security firm Elliptic called it the eighth-largest theft in crypto history.
Fortunately, there were some recorded recoveries in Q2 2024. For instance, ALEX Lab lost $4.3 million and recovered $3.9 million, whilst YOLO Games lost $1.5 million and then recovered $1.35 million.
Interestingly, the Gala Games hacker, who stole 5,913 ETH, worth $21 million, returned all of it.
“This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages…Robust measures to safeguard the entirety of the ecosystem are crucial,” wrote Immunefi founder and CEO, Mitchell Amador.
Fraud incidents down year-on-year
Interestingly, isolating fraud incidents shows losses are down 81% compared to Q2 2023. However, hacks are up 155% in the same period.
In total, the crypto ecosystem has recorded $920.9 million in year-to-date (YTD) losses across 135 incidents. May contributed the highest to this total at $358.5 million, followed by June and January, at $141.5 million and $133.4 million, respectively.
👉 Whilst it did not make Immunefi’s highlight, a major scam incident in 2024 was the ZKasino scam, where the team behind the crypto gambling platform surprisingly diverted $33 million worth of refunds to staking protocol Lido.
An on-chain investigation conducted by major exchange Binance helped identify the 26-year-old suspect, who was later arrested by the Netherlands' Fiscal Information and Investigation Service (FIOD).
The FIOD seized more than 11.4 million euros worth of real estate, a luxury car, and cryptocurrencies from the suspect.
