A new study shows that crypto fraud has weakened while technology allows more funds to be recovered
Blockchain security company PeckShield has publicized data outlining the 2023 losses to crypto hacks and scams. According to the report, except for multichain losses, $2.61 billion was lost during the year. PeckShield documented in its January 29 report that the amount demonstrates a 27.78% decrease compared to 2022, when worldwide cyber thefts tallied about $3.6 billion.
PeckShield also underscored that more than $674 million was recovered from over 600 large-scale hacks that they tracked, equaling 25% of the stolen funds. PeckShield said that the funds recovered increased significantly from 2022, when it assessed that $133 million was recovered. The rescue of funds resulted from increased negotiations with hackers and the usage of bug bounty programs.
#PeckShieldAlert 2023 saw 600+ major hacks in the crypto space, resulting in ~$2.61B in losses, with $674.9M recovered.
$1.51B lost to hacks (excluding #Multichain unauthorized withdrawals) & $1.1B to scams. This marks a 27.78% decrease from 2022. #DeFi protocols remained prime… pic.twitter.com/G7PIU3WyrX— PeckShieldAlert (@PeckShieldAlert) January 29, 2024
The company explained, “Engaging in active negotiations with hackers can lead to the return of stolen funds. […] Implementing bug bounty programs or on-chain sleuthing to identify hackers and vulnerabilities in the system can enhance security.”
PeckShield also says that teaming up with centralized exchanges, Tether and law enforcement to freeze the detected funds will often increase the chances of recovery. It also highlighted various other topics, including decentralized finance (DeFi), flash loans and the volume disparity between hacks and scams. The information revealed that 40% of hacks in 2023 involved flash loans.
Data showed that 67% of 2023 losses were in DeFi, with 33% in centralized finance. It also highlighted that 58% were due to hacks, and 42% were from scams.
Cybercriminals have also been diversifying their crypto targets. Between 2018 and 2021, Bitcoin led the trading volume for unlawful transactions. However, things changed in 2022 and 2023, as stablecoins began to take a bigger percentage of illegal transactions.
