As an analyst with over two decades of experience in cybersecurity and blockchain, I can confidently say that Q3 2024 has been a challenging quarter in the world of crypto. The drop in the number of hacks is certainly a positive sign, but the fact that 95% of the stolen funds remain unrecovered is a stark reminder of the evolving nature of cyber threats and the need for stronger post-incident response strategies.
As an analyst reviewing cybersecurity data, I’ve noticed a significant decrease in the frequency of hacking incidents during Q3 2024. In fact, the number of such events has dropped to its lowest point in three years, with just 28 reported occurrences. The total amount stolen across these incidents reached a staggering $463.6 million.
Regrettably, the situation still looks bleak since it’s impossible to retrieve more than $440 million of the stolen money.
Worst Recovery Rates Ever
As a crypto investor, I’ve been paying close attention to a recent report by Hacken, shared with CryptoPotato. The findings are startling: an overwhelming 95% of funds stolen in the latest quarter have vanished for good. This is a stark contrast to previous periods where around 50-60% of stolen assets were either frozen or recovered.
Consequently, the large amount of unclaimed assets underscores the immediate importance of more robust strategies for handling situations after they occur.
As a crypto investor, I must admit this quarter has been particularly challenging. The majority of funds either stolen or frozen have yet to be restored, with only three projects managing to recover their lost assets. We had optimistically anticipated that the practice of returning a portion of the misappropriated funds, common in previous quarters, would persist – but unfortunately, it seems that’s not the case this time around.
In terms of regional losses, it’s worth noting that Asia suffered the most significant setback this quarter, totalling approximately $264 million. Australia came second with about $43.3 million, while Europe reported around $22.16 million, and North America saw a loss of around $15 million over the same timeframe.
The form of attack causing the most harm persists, where an unscrupulous user takes over seed phrases or functions, thereby having unrestricted access to withdraw funds from wallets or smart contracts. In Q3 alone, eight such incidents resulted in a staggering $316 million being stolen, which is more than double the percentage of assets lost due to all other types of attacks combined.
Coming next, we have the reentrancy attack, known as one of the most resilient techniques for draining assets from a protocol. It occurs when an attacker takes advantage of a loop in the smart contract’s withdrawal function to repeatedly withdraw funds. This kind of attack can be particularly detrimental to protocols that feature liquidity pools.
Despite just three instances of reentrancy attacks this quarter, these incidents led to cumulative losses surpassing $33 million across multiple assets.
Evolving Threats
Despite a decline in typical rug pulls, there’s been an escalation in the launch of meme coins on platforms such as Binance Smart Chain, Tron, and Solana. Particularly on Solana’s meme coin platform, pump.fun, over 2 million coins were recently introduced, yet only 89 of them managed to reach a market capitalization of $1 million.
As a savvy crypto investor, I’ve noticed an unsettling trend: it seems like dishonest rug pull scammers are flocking to various platforms, churning out low-value coins that mimic rug pull schemes but lack any genuine activity. This finding comes from Hacken’s report, which serves as a stark reminder of the need for due diligence when investing in new cryptocurrencies.
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2024-10-07 00:38