Over half a billion dollars worth of cryptocurrency was stolen in the second quarter this year through hacks and scams, with two incidents making up the bulk of the stolen funds, according to a recent report by bug bounty platform Immunefi.
The first was a May 31 hacking attack against Japanese cryptocurrency platform DMM Bitcoin that led to a loss of around $305 million, while the second was a cyberattack targeting Turkish crypto exchange BtcTurk, on June 23, which resulted in $55 million worth of funds getting stolen.
More than $920 million in crypto losses were identified—a 24 percent increase compared to the same period last year.
Main targets of the exploits were centralized finance (CeFi) entities. In CeFi, all crypto trades are handled via a central exchange. This stands in contrast to decentralized finance (DeFi) where there is no exchange involved in the trade.
CeFi losses made up 70 percent of the total losses, with DeFi accounting for the remaining 30 percent.
“This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages,” said Immunefi CEO Mitchell Amador.
“This was evident during this quarter, where losses surged primarily 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 data shows that $26.7 million was recovered from four incidents in Q2, representing only 5 percent of total losses. The recovery rate was a slight improvement over the 3.9 percent recovered in Q2, 2023.
Crypto Hackers
The U.S. Department of Justice has arrested several people 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. This allegedly allowed them to gain access to certain pending transactions and eventually steal people’s cryptocurrency.
In one incident, he attacked crypto exchange Nirvana Finance and stole $3.6 million in funds. The theft represented almost all the funds owned by the company. As a result, Nirvana was forced to shut down.
“Digital tools are making it easier than ever to target hard-working Americans, and we see the effects of that in the data we’re releasing today,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection.
“The FTC is working hard to take action against those scams,” he added.