- Q1 of 2023 saw a drastic decline in the amount of money lost to crypto hacks and scams.
- This decrease is likely attributable to heightened awareness by regulators and exchanges for potential malicious activity.
The crypto space has long been plagued by security issues, with hackers and scammers targeting users and platforms to steal funds. However, a BanklessTimes.com analysis reports that funds lost to crypto hacks and scams in Q1'23 shrunk by 65% year on year (YoY), indicating some progress in mitigating security threats.
The total funds lost to cryptocurrency hacks and scams in Q1'23 amounted to $ 452 million, compared to $ 1.3 billion reported in Q1'22. However, out of the figure lost in Q1 2023, $ 215 million was lost within the first 20 days of March alone – underscoring the rapid pace at which scammers have been operating in recent weeks.
BanklessTimes CEO Jonathan Merry commented on the data saying:
This significant decline indicates that cryptocurrency players are taking security seriously and implementing measures to prevent hacks and scams. There is also growing awareness among users, who are taking proactive measures such as using secure wallets and two-factor authentication to secure their digital assets.BanklessTimes CEO, Jonathan Merry
Largest Financial Losses in Q1
Most funds lost this quarter were due to Flash Loan issues, with over $ 200 million lost in these cases. Ethereum was the chain where the highest losses were recorded, followed by BNB Smart Chain with 18 cases and ETH/Arbitrum with 10/7 cases, respectively.
Furthermore, Oracle's issue posed a major security threat accounting for almost $121 million in losses. Exit scams and others accounted for the remaining losses.
The decline in funds lost to crypto hacks and scams indicates that the industry is moving towards greater security and sustainability. It is also a testament to the efforts made by developers, exchanges, and investors in creating safe and secure digital environments.
Funds Recovered
A total of $130 million in funds was recovered from crypto hacks and scams in Q1'23. No money was recovered from crypto hacks and scams during the months of January and February, but the entire amount was eventually recovered in March.
It is encouraging to see that cryptocurrency platforms are making efforts to mitigate security threats and protect users from financial losses caused by hackers and scammers. This is a positive step towards building a secure and compliant digital ecosystem.
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