The crypto community is being urged not to let their guard down despite a significant decline in crypto hacks during the first quarter of 2023 – with one firm warning it is most likely a “temporary reprieve, rather than a long-term trend.”
2022 was the biggest year for crypto hacking in history, with an estimated $3.8 billion stolen, primarily from decentralized finance (DeFi) protocols and North Korea-linked attackers, according to a report from Chainalysis earlier this year.
However, this number appears to have drastically reduced in the first quarter of 2023. According to a May 21 report by TRM Labs, the amount stolen through crypto hacks in Q1 2023 “was less than any other quarter in 2022.”
Graph showing hacks and exploits from Q1 2022 – Q1 2023. Source: TRM Labs
It was also noted that the average hack size dropped nearly 65% compared to the prior year period.
“The average hack size also took a hit in Q1 2023 - to USD 10.5 million from nearly USD 30 million in the same quarter of 2022, even as the number of incidents was similar (around 40).”
Despite the drop, history suggests crypto users shouldn’t get complacent. Crypto hacks fell significantly in Q3 2022, right before “a record-setting number of hacks” in Q4 which “turned 2022 into a record year,” noted TRM Labs.
“Unfortunately, this slowdown is most likely a temporary reprieve rather than a long-term trend” it noted, adding that just a few large-scale attacks could be enough to tip the scales again.
While it was noted that “there is no one obvious explanation for the lull,” TRM Labs suggested the sanctioning of cryptocurrency mixer Tornado Cash by the U.S. Treasury, and the arrest and charge of Mango Markets’ exploiter Avraham Eisenberg may have discouraged would-be hackers.
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In January, blockchain security firm Certik told Cointelegraph that it does not “anticipate a respite in exploits, flash loans or exit scams.”
It noted the likelihood of “further attempts from hackers targeting bridges in 2023.” Such bridges accounted for six of the 10 largest exploits in 2022, which saw around $1.4 billion stolen.
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