The cryptocurrency market has demonstrated great resilience in the face of adversity, achieving a record 77% recovery rate for stolen funds in the second quarter of 2024.
In Q2 2024, of the 512.9 million USD in crypto assets lost, 347.4 million USD was recovered or frozen, according to Hacken’s Web3 Security Report for Q2 2024.
“For two consecutive quarters, the bright spot, despite the alarming rate of thefts in the crypto sector, has been the amount of funds recovered,”
“This time, the industry was able to recover more than half of the assets targeted by scammers and hackers.”
Drop in cryptocurrency attacks and stolen funds
The recent report revealed that the second quarter of 2024 saw a decrease in the number of cyber attacks compared to the first quarter, with total incidents falling from 67 to 41. However, despite this positive trend, financial losses remain a critical concern, with second quarter losses reaching 512.9 million USD, nearly equaling total losses for all of 2023.
The most common type of attack in the second quarter was related to access control failures, which, although less frequent, resulted in the largest financial losses. For example, the DMM Bitcoin incident alone represented a staggering loss of 305 million USD, highlighting the severe impact of security breaches on centralized finance (CeFi) platforms.
Other notable attack vectors included flash loan attacks, which totaled 84.36 million USD, and rug pull scams , resulting in 23.1 million USD in losses. CeFi platforms, despite their perceived security, have not been immune to significant breaches.
🚨 Web3 Security Report Alert: Total losses for H1 2024 nearly match all of 2023
We’ve teamed up w/ @hackenproof to bring you the Q2 '24 Security Report
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The attack on Rain Exchange, due to a breach in the security of private keys, led to a loss of 14.8 million USD. Furthermore, token projects have been particularly susceptible to attacks. Much of it comes from its rapid growth and the complex nature of smart contracts.
Many new projects prioritize rapid releases over thorough security audits, resulting in overlooked vulnerabilities. The sophistication of social engineering tactics has also made it easier for attackers to gain access to critical administrative accounts and sensitive information.
Growth of cryptocurrency scams on the X platform
Cryptocurrency scams have been on the rise on the X platform, with analysis indicating that a significant portion of these scams occur through fake profiles on the network. Scam Sniffer, a company specializing in combating fraud in the web3 universe and present on X, revealed that almost 50 million USD is lost monthly due to fake accounts on X.com.
These issues existed before Elon Musk took over the platform. However, the confusion created by the owner’s new paid verification policy has contributed to keeping the general public vulnerable to these impersonation scams. The verification service allows anyone with a smartphone to sign up and get verified, which can make it difficult to distinguish between legitimate and fraudulent accounts.
Recently, Yi He, co-founder of Binance, expressed concerns about the proliferation of cryptocurrency scams on X. Finally, he questioned whether Musk would take steps to resolve the issue.
Similarly, rapper 50 Cent, whose real name is Curtis Jackson, was the victim of a hacking incident on his X account. As a result, his account was used to promote a fraudulent meme coin based on the Solana blockchain.
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