Attacks on token protocols and crypto projects dropped a staggering 70% in Q1 2023 compared to the same period last year when greed and valuations ran rampant, a new report by security firm TRM Labs shows.
The stolen amount in the first three months this year is less than any quarter in 2022, showcasing better security measures and suggesting an overall drop in easy exploits.
The average hack size also took a hit in Q1 2023 – to $10.5 million from nearly $30 million in the same quarter of 2022, even as the number of incidents was similar (around 40), TRM Labs said in its report.
“To date, hacking victims have recovered over half of all stolen funds in Q1 2023,” the firm added. “For example, in March 2023, a hacker exploited a bug in Tender.fi’s code that allowed the attacker to steal over USD 1.5 million. The hacker later contacted Tender.fi and agreed to return the funds in exchange for a bug bounty of 62.15 ether, worth $850,000.”
The cryptocurrency ecosystem has long been a target for hackers due to its inherent vulnerabilities. However, the significant reduction in crypto hacks during the first quarter of 2023 suggests that the industry has been actively addressing these challenges and implementing proactive security measures.
Last year saw over $3.7 billion lost to various attacks, hacks and scams – making 2022 the worst year in the market’s history so far. Attackers gained over $3.2 billion in 2021. But 2022 was off to an even rockier start with a $325 million exploit of popular cross-chain service Wormhole, which was followed by a $625 million attack on Axie Infinity’s Ronin bridge, and then a $200 million exploit of the Nomad bridge.
As per TRM Labs, this year’s decline in crypto hacks could be attributed to various factors, including improved cybersecurity practices, stricter regulatory frameworks and increased collaboration among industry participants.
However, reasons for concern remain.
“Unfortunately, this slowdown is most likely a temporary reprieve rather than a long-term trend,” TRM Labs said, adding that a few large-scale attacks account for most of the amount stolen from crypto platforms and users, which can cause the total amount stolen to fluctuate dramatically month-to-month.
“The cilt largest hacks in 2022 accounted for approximately 75% of the total amount stolen in 2022,” it concluded.