Positive signs emerged for the cryptocurrency industry this week, with a new report indicating a significant decrease in losses from hacks and fraud. According to a May 30 report by blockchain security firm Immunefi, crypto losses from these activities declined by 12% year-over-year. In total, $52 million was lost in May 2024, a decrease from over $59 million in the same month last year.
This trend aligns with previous reports. Immunefi’s March report showed a 23% drop in Q1 2024 losses compared to the previous year, and cybersecurity firm CertiK reported record lows in April.
Two Major Attacks Dominate Losses
While the overall trend is positive, Immunefi’s report highlights that a small number of incidents can still cause significant damage. Two individual attacks accounted for the majority of May’s losses:
- A hack on Web3 gaming protocol Gala Games resulted in roughly $21 million lost.
- A smart contract exploit on Sonne Finance led to $20 million in losses.
Combined, these two attacks comprised 78% of total losses for the month.
Ethereum and BNB Chain Remain Prime Targets
The report also reveals that attackers primarily targeted Ethereum and BNB Chain networks in May. These two blockchains accounted for 62% of all attacks, with decentralized protocols being the sole targets. Notably, no centralized exchanges suffered losses from attacks during this period.
Interestingly, fraud continues to represent a minor portion of overall losses. Only $1.7 million, or 13.6%, stemmed from fraudulent activities, with the remaining losses attributed to hacks and exploits.
Also Read: Cryptocurrency’s Achilles’ Heel: Understanding and Mitigating Address Poisoning Attacks
Reasons for Decline Unclear
The report offers no definitive explanation for the decline in crypto crime losses. However, similar trends were observed in 2023, leading experts to attribute it to advancements in security technology and improved policing practices. Additionally, companies like Blockaid claim their software has contributed by forcing some crypto drainers to shut down, further reducing threats to crypto users.
While the reasons remain unclear, a downward trend in crypto crime is a welcome development for the industry. As security measures evolve and law enforcement adapts, losses from hacks and fraud may continue to decline, fostering a more secure environment for investors and fostering wider adoption of cryptocurrencies.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. chainaffairs.com is not responsible for any financial losses.
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