Crypto scams and hacks led to a $656 million loss in H1 2023, but $215 million of stolen assets were recovered, with a decrease in hacks compared to previous periods, according to Beosin’s report.
The alarming extent of financial losses incurred due to cryptocurrency hacks, scams, and rug pulls during the first half of 2023 has been brought to light by a recent report published by Web3 security firm Beosin. According to the report, a staggering total of $656 million has been lost in these illicit activities.
However, amidst this disheartening revelation, there is a glimmer of hope, as approximately $215 million worth of stolen assets have been successfully recovered, marking a significant improvement compared to previous years.
The analysis conducted by Beosin unveils a breakdown of the losses incurred in various categories. Notably, $471.43 million was lost in 108 protocol attacks, highlighting the vulnerability of cryptocurrency protocols.
Additionally, $108 million was attributed to phishing scams, reflecting the growing sophistication of fraudulent activities within the cryptocurrency ecosystem. Furthermore, $75.87 million was lost through 110 rug pulls, emphasizing the prevalence of deceptive practices prevalent in certain projects.
The report provides a noteworthy comparison to previous periods, showcasing a decline in the losses resulting from hacks. Specifically, the losses incurred in H1 2023 represent a significant decrease compared to the respective losses of $1.91 billion and $1.69 billion in H1 and H2 2022. This data suggests that efforts to enhance security measures may be yielding positive results.
According to the report, a positive aspect is the successful retrieval of stolen assets, with approximately $215 million (45.5% of the stolen assets) being recovered. This marks a significant improvement from the previous year when only 8% of the stolen assets were successfully recovered.
Notably, $113 million of the stolen assets were traced to mixers, with $45.38 million going through Tornado Cash and $68.14 million being funneled into other mixers. These findings suggest efforts to conceal the origins of the illicit funds.
The report also provides insights into specific incidents of high-value hacks. Euler Finance’s flash loan hack stands out as the most significant incident, resulting in a loss of $195 million. However, the majority of the stolen assets were returned by the hackers, and Euler Finance reopened redemptions on April 12, indicating a swift response and resolution to the breach.
In terms of the types of cryptocurrencies affected, the majority of losses occurred within the Ethereum ecosystem, with coins and tokens minted on the Ethereum blockchain accounting for 75.6% of the total losses. Binance Smart Chain tokens represented a mere 2.6% of the stolen assets, signifying a lesser impact on that platform.
Regarding the causes of the losses, the report identifies smart contract vulnerabilities as the primary reason, accounting for 56% of the incidents. However, 21.4% of the losses had no clear identifiable reasons, indicating the need for further investigation and analysis.
The report highlights a noteworthy decrease in losses during H1 2023 compared to the record-breaking losses of $2.1 billion in the second half of 2021, suggesting that industry efforts to enhance security and implement stricter measures may be positively influencing the cryptocurrency ecosystem’s overall security landscape.