In 2023, PeckShield, a blockchain security firm, reported a significant decrease in losses attributed to hacks and scams, marking a notable contrast to the previous year. Their data revealed that the total losses amounted to $2.61 billion, excluding multichain losses, indicating a substantial 27.78% reduction from the approximately $3.6 billion recorded in 2022.
PeckShield report highlights positive recovery trends
The report, released on January 29, emphasized a positive trend in the recovery of funds from large-scale hacks. PeckShield managed to recover over $674 million from more than 600 such incidents, reflecting a noteworthy 25% of the stolen crypto. This represented a substantial increase compared to the estimated $133 million recovered in 2022. The security firm attributed this improvement to a combination of factors, including more active negotiations with hackers and the increasing prevalence of bug bounty programs.
PeckShield’s team highlighted the effectiveness of engaging in active negotiations with hackers and implementing bug bounty programs or on-chain sleuthing to identify vulnerabilities in the system. Furthermore, they underscored the importance of collaboration with centralized exchanges, Tether, and law enforcement to freeze funds upon detection as a successful strategy for fund recovery. Beyond the recovered amounts, the PeckShield report delved into various aspects of the crypto landscape, shedding light on flash loans, decentralized finance (DeFi), and the distinction between hacks and scams.
Evolving challenges and positive developments
Notably, 40% of the hacks in 2023 involved flash loan attacks. Despite claims of improved DeFi security, PeckShield pointed out that DeFi remained a prime target for hacks and scams, constituting 67% of the losses in 2023, while 33% occurred in centralized finance. Of the total losses, 58% were attributed to hacks, and 42% resulted from scams. CertiK co-founder Ronghui Gu expressed optimism regarding 2023, labeling it as a positive development in blockchain security. Gu attributed this positive trend to the growth of bounty platforms and the proactive security measures that gained prominence during the year.
Despite these positive trends, PeckShield’s data underscored the persistent challenges within the crypto space, particularly the diversification of cryptocurrencies targeted by malicious actors. While Bitcoin dominated illicit transaction volumes from 2018 to 2021, stablecoins gained prominence in 2022 and 2023, signaling a shift in the landscape of illicit transactions. The PeckShield report highlighted a decline in crypto losses from hacks and scams in 2023.
It also highlighted the increase in recovery efforts and the adoption of proactive security measures playing crucial roles. However, the data also emphasized the ongoing vulnerability of DeFi to malicious activities and the evolving nature of illicit transactions. This underscores the need for continued vigilance and adaptation within the blockchain security community to address emerging threats effectively.
