In a year that has seen the cryptocurrency market continue to mature, a darker narrative has also unfolded. Nearly $1 billion has been lost to various forms of cybercrime in the crypto space in 2023, according to a report by CertiK, a blockchain security firm
August alone sees $45.8 million in losses
Data from CertiK, a blockchain security company, revealed that the month of August alone accounted for approximately $45.8 million in losses due to crypto-related exploits, hacks, and scams.
The breakdown shows that exit scams were responsible for around $26 million of the losses. Flash loans, a relatively new form of uncollateralized lending in the DeFi space, contributed to about $6.4 million in losses. Exploits, which include vulnerabilities in smart contracts and other blockchain technologies, made up the remaining $13.5 million.
Exit scams and flash loans among major culprits
Exit scams have been a significant contributor to the losses, often involving projects that collect funds from investors and then disappear. Flash loans, on the other hand, are a newer phenomenon. These are essentially unsecured loans that must be returned within the same transaction block. While they offer legitimate use cases, they have also been exploited for quick profits, contributing to the losses seen in August.
CertiK has identified several major incidents that resulted in significant financial losses. Specifically, the Zunami Protocol attack led to $2.2 million in losses, the Exactly Protocol exploit resulted in $7.3 million in losses, and the PEPE withdrawal incident resulted in losses of $13.2 million.
As per CertiK, the total loss due to hacks, scams, and exploits in 2023 has surpassed $997 million. This amount includes around $261 million lost to flash loan attacks, over $137 million lost to exit scams, and more than $596 million lost to exploits.
Although the losses in August are still considerable, they are significantly lower than those incurred in the previous month. In July 2023, crypto investors lost about $303 million worth of digital assets in cryptocurrency exploits and hacker attacks.
The losses in August are part of a larger trend that has seen almost $1 billion siphoned off in various crypto-related cybercrimes throughout 2023. This comes at a time when the global cryptocurrency market cap has exceeded $2 trillion, according to data from CoinMarketCap.
The increasing losses indicate that as the market grows, so does the incentive for illicit activities. Regulatory bodies like the U.S. Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC) have been ramping up efforts to crack down on crypto-related crimes. Still, the numbers suggest that more needs to be done to secure this burgeoning financial ecosystem.
