Crypto Hacking Losses Down by 50% in 2023

According to a report from blockchain intelligence firm TRM Labs, the cryptocurrency industry has seen a significant reduction in losses due to hacking in 2023, with figures dropping by more than 50% compared to 2022. This decrease is largely attributed to enhanced security measures within the industry.

The report, released on December 13, indicates that losses from 160 hacks targeting crypto projects totaled approximately $1.7 billion in 2023. This is a marked decline from the $4 billion stolen in 2022 through various internet protocol breaches.

TRM Labs credits this downturn to the crypto industry’s adoption of advanced security practices, including real-time transaction monitoring, anomaly detection systems, and strengthened security of digital wallets and exchange platforms.

In 2022, the crypto sector experienced a significant downturn and faced numerous high-profile thefts and hacks. Chainalysis had even dubbed 2022 as the “largest year ever for hacking activity” by mid-October.

However, 2023 has seen considerable efforts from law enforcement agencies globally to combat cybercrimes related to digital currencies. Their collaborative actions, quick response capabilities, and improved asset recovery methods have increased the likelihood of detecting and prosecuting cybercriminals, thereby deterring potential hackers.

The industry, encompassing cryptocurrency exchanges, blockchain networks, and wallet providers, has also taken a unified approach in 2023 by sharing information about vulnerabilities, threats, and breach incidents. This collaborative stance has significantly fortified the sector’s defenses against cybercriminals.

The TRM Labs report further details that over 60% of the total losses in 2023 were due to infrastructure attacks, often involving theft of private keys or compromised seed phrases. The majority of the losses were concentrated in large-scale attacks on specific targets, with the top 10 hacks accounting for about 70% of the total stolen funds.

While the report acknowledges a reduction in hacking incidents, it also emphasizes the evolving nature of cyber threats. It underscores the need for the cryptocurrency industry and law enforcement to remain vigilant and adaptable to sustain this positive trend in a rapidly changing digital landscape.

In the first eight months of 2023 alone, the crypto industry faced nearly $1 billion in losses due to hacks, exploits, and scams. Notable incidents included a significant digital asset loss in a hack on the Poloniex exchange exceeding $100 million, and the HECO Chain bridge hack, which led to the theft of over $80 million.