Crypto-related hacks and scams saw a 27.78% year-over-year decline in 2023 as the industry has become more vigilant.

Blockchain security firm PeckShield published the data on Jan. 29 in a detailed report on hacks and scams that took place throughout the year.

Hacks and recoveries

According to PeckShield’s recent report, 2023 saw over 600 major hacks in the crypto space that culminated in a loss of approximately $2.61 billion.

This figure, though staggering, is a reduction from the amount stolen during the previous year, which exceeded $3.6 billion. The breakdown of the 2023 figures shows that $1.51 billion was lost due to hacks, while scams accounted for $1.1 billion of the total losses.

One of the most notable incidents of the year involved the cryptocurrency exchange Poloniex, which suffered a significant hack in November 2023, leading to losses of over $100 million. In response, major shareholder Justin Sun announced a $10 million bounty for the hackers.

The year also saw sophisticated phishing scams, with one such coordinated attack leading to the theft of approximately $3.3 million after targeting a group of Web3 firms with fake airdrop promises.

Meanwhile, recovery efforts have improved significantly over previous years, with roughly $674.9 million recovered following the incidents in 2023. This marks a significant increase from the $133 million recovered in 2022.

The improvement is attributed to enhanced community vigilance, collaborative efforts by Web3 executives, and intensified negotiation tactics by blockchain firms. Moreover, increased regulatory scrutiny has led law enforcement agencies to intensify their efforts in tracking down and prosecuting cybercriminals, contributing to the recovery of stolen assets.

DeFi at most risk

PeckShield’s report also highlighted that decentralized finance (DeFi) protocols remain prime targets for cybercriminals, accounting for 67% of the total stolen value.

The susceptibility of DeFi to such attacks was particularly evident in November 2023, which saw the largest amount of theft, with approximately $364.4 million stolen during the month. The figure was significantly higher than other months, with only September and March coming close to similar numbers.

The overall decline in crypto-related hacks and scams in 2023 is a positive indicator for the industry, reflecting growing maturity and resilience against cyber threats. The collaborative efforts of the crypto community, law enforcement, and regulatory bodies, coupled with enhanced security measures and user awareness, are contributing to a safer digital asset environment.

However, the high value of losses and the continued targeting of DeFi platforms reflect the need for ongoing vigilance and innovation in cybersecurity within the cryptocurrency sector.

Assad Jafri

AJ, a passionate journalist since Yemen's 2011 Arab Spring, has honed his skills worldwide for over a decade. Specializing in financial journalism, he now focuses on crypto reporting.

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