Only approximately 5 percent of the stolen funds, valued at around $27 million, were successfully recovered.
In the second quarter of this year, over half a billion dollars’ worth of cryptocurrency was stolen through hacks and scams, with two major incidents accounting for the majority of the stolen funds, as per a recent report by bug bounty platform Immunefi.
The first incident was a hacking attack on May 31 against Japanese cryptocurrency platform DMM Bitcoin, resulting in a loss of approximately $305 million. The second incident was a cyberattack on Turkish crypto exchange BtcTurk on June 23, leading to the theft of $55 million worth of funds.
More than $920 million in crypto losses were reported, marking a 24 percent increase compared to the same period last year.
The primary targets of these exploits were centralized finance (CeFi) entities, where all crypto trades are handled through a central exchange. This differs from decentralized finance (DeFi) where there is no involvement of an exchange in the trade.
CeFi losses represented 70 percent of the total losses, with DeFi accounting for the remaining 30 percent.
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“This quarter emphasizes how infrastructure compromises can result in the most devastating hacks in crypto, as a single compromise can lead to millions in damages,” stated Immunefi CEO Mitchell Amador.
“This was evident during this quarter, where losses surged mainly due to hacks targeting CeFi infrastructure, surpassing DeFi, despite a smaller number of hacks in that sector. Robust measures to safeguard the entirety of the ecosystem are crucial.”
Immunefi’s data indicates that $26.7 million was recovered from four incidents in Q2, representing only 5 percent of total losses. This recovery rate showed a slight improvement over the 3.9 percent recovered in Q2 2023.
Crypto Hackers
The U.S. Department of Justice has apprehended several individuals in connection with crypto hacking incidents over the past year.
They are accused of manipulating and tampering with the processes used to validate transactions on the Ethereum blockchain, enabling them to access certain pending transactions and ultimately pilfer people’s cryptocurrency.
In one instance, he targeted crypto exchange Nirvana Finance and absconded with $3.6 million in funds, nearly wiping out all of the company’s assets, leading to its closure.
“Digital tools are facilitating the targeting of hard-working Americans more easily than ever before, and we witness the repercussions in the data we’re releasing today,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
“The FTC is diligently taking action against these scams,” he added.
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