Crypto Attacks Fall 70%: But The Downward Trend Is A Temporary Lull, TRM Labs Says

The first quarter of 2023 saw a remarkable 70% decrease in cyberattacks on crypto projects and token protocols as compared to the same period last year, Coindesk reported citing security firm TRM Labs.

Lower amounts were stolen in the first three months of 2023 compared to any quarter of 2022 due to an improvement in security measures and a reduction in vulnerabilities exploited by attackers,

The average size of hacks in the first quarter (Q1) of 2023 is down to $10.5 million from almost $30 million in the same period in 2022. The number of incidents, however, remains fairly consistent at around 40.

Over half of the funds stolen in Q1 2023 "have been recuperated by their rightful owners,” TRM Labs claims.

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In March, a hacker exploited a flaw in Tender.fi's code to abscond more than $1.5 million. The funds were eventually returned in exchange for a bug bounty of 62.15 ether ($850,000).

The crypto ecosystem, due to its intrinsic security vulnerabilities, has traditionally been a prime target for hackers. However, the noticeable dip in crypto-related cyberattacks in Q1 2023 indicates a positive trend, pointing to an industry actively working towards identifying and rectifying security concerns.

Historically, 2022 witnessed a staggering loss of over $3.7 billion to attacks, scams, and hacks, making it the most financially damaging year to date for the crypto market.

This surpassed the hefty loss of over $3.2 billion in 2021. Among the exploits included a $325 million attack on the cross-chain service Wormhole; a $625 million hack on Axie Infinity's Ronin bridge; and a $200 million breach of the Nomad bridge.

The reported downturn in crypto-related cybercrime this year can be attributed to several factors such as heightened cybersecurity practices, stringent regulatory frameworks, and enhanced industry collaboration.

Nevertheless, TRM Labs says "this downward trend is more likely a temporary lull rather than a permanent shift."

It cautions that large-scale attacks make up the majority of funds stolen from crypto platforms and users, leading to substantial month-to-month variability in the total amounts pilfered.

“In 2022, the ten most substantial hacks accounted for roughly 75% of the total amount stolen during the year,” TRM Labs concluded.

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