Decline in hack volumes attributed to enhanced security measures in the cryptocurrency industry.
A TRM Labs research has revealed that the cryptocurrency industry witnessed a downturn in hack volumes in 2023, with a more than 50% reduction compared to the previous year.
Despite a consistent number of attacks, around 160, the total value stolen dropped dramatically to $1.7 billion, less than the nearly $4 billion lost in 2022.
A Closer Look at the Figures
Since the inception of cryptocurrency in 2009, hackers have stolen billions of dollars in digital assets annually.
In 2020, approximately $1.9 billion was stolen, while 2021 saw a significant increase, with $14 billion swiped, marking a record year. In 2022, cryptocurrency hacks resulted in $3.8 billion being stolen from industry businesses, according to a Chainalysis report.
The TRM Labs research has also revealed that the majority of these incidents, approximately 60%, were infrastructure attacks. Infrastructure attacks involve the theft of private keys or the compromise of seed phrases, where culprits infiltrate the foundational structure of a cryptocurrency system like its servers, networks, or software – to either steal assets or distort trades.
Each incident of these attacks averaged around $30 million, considerably larger than protocol assaults and code exploit attacks. Together, the latter only constituted a fifth of the total hack volumes.
Consistent with patterns observed in 2022, a handful of major heists dominated the landscape. The top ten attacks represented nearly 70% of all stolen funds. Several of these exceeded $100 million, with notable incidents targeting Euler Finance in March, Multichain in July, Mixin Network in September, and Poloniex in November.
Decline in Crypto Hacks Linked to These Developments
The research attributes the decline in hack volumes to three key developments. The first is improved security measures in the cryptocurrency industry, including enhanced real-time transaction monitoring and anomaly detection systems.
Increased law enforcement actions have also contributed to agencies worldwide collaborating more closely, leading to quicker responses and more effective asset recovery.
Greater industry coordination with exchanges, wallet providers, and blockchain networks has also led to better information sharing on vulnerabilities and breaches, creating a unified defense against cyber threats.
Despite these encouraging signs, the landscape of cryptocurrency hacks remains rapidly evolving and inherently uncertain.
The research concludes by urging the industry and law enforcement to maintain their vigilance and adaptability to sustain this positive trajectory into 2024, as the emergence of new, sophisticated threats could reverse the current decline in hack volumes.