In Q3 2024, there was a notable decrease in losses related to crypto hacks and frauds, although Ethereum (ETH) continued to be the most targeted smart contract platform, according to a detailed report by Immunefi. This report provides valuable insights into the nature of these incidents and the platforms most affected.
Losses Primarily Due To Centralized Exchange Hacks
Immunefi’s Q3 2024 report reveals critical data on cryptocurrency-related hacks and losses. Two major centralized exchange hacks, WazirX in July 2024 and BingX in September 2024, were responsible for a staggering 69.5% of the total funds lost during the quarter, amounting to $287 million.
WazirX and BingX, both centralized exchanges, lost $235 million and $52 million, respectively. Centralized finance (CeFi) platforms were responsible for 74.8% of all successful exploits during this period, whereas decentralized finance (DeFi) platforms accounted for 25.2% of the total funds lost.
Interestingly, despite only three incidents targeting CeFi platforms, the losses amounted to $309 million in Q3 2024. In comparison, DeFi platforms experienced 31 incidents, resulting in $104 million in losses. Notably, DeFi losses decreased by 79.2% compared to Q3 2023, while CeFi losses surged by 66.4%.
“We’re seeing a higher number of incidents targeting DeFi, while CeFi experiences fewer incidents but often with more severe consequences, with hundreds of millions in stolen funds in a single exploit. In CeFi, the biggest infrastructural issue is private key management, which is essential to maintaining the self-custody of crypto assets but is not typically subject to security audits. It requires rigorous key management policies, practices, and emergency plans,”
The report also highlights the overall reduction in losses from crypto hacks and frauds. Compared to Q3 2023, these losses fell by 38.2% and 86.4%, respectively, in Q3 2024.
Ethereum Reigns Supreme As Hackers’ Favorite Blockchain
The report points out that Ethereum and Binance Chain (BNB) were the top two targeted smart contract platforms in Q3 2024. Ethereum experienced 15 incidents, accounting for 44.1% of the total losses, while Binance Chain was responsible for 23.5% of the losses with eight incidents.
Coinbase’s Base chain ranked third, with 5.9% of losses across various blockchains. Other targeted blockchains included Blast (BLAST), Solana (SOL), and Ethereum layer-2 scaling solution Arbitrum (ARB), each with one incident.
Attacks on layer-2 scaling solution-based protocols are not surprising due to their nascent stage and limited security infrastructure. Earlier this year, Emin Gün Sirer, co-founder of the Avalanche (AVAX) blockchain, highlighted the red flags to watch for in new layer-2 projects.
The increasing frequency of hacks and frauds in the crypto space underscores the critical role of white-hat and gray-hat hackers. For instance, the recent incident involving the DeFi protocol Rho Markets showcased the importance of these ethical hackers.
At the time of this report, Bitcoin (BTC) was trading at $64,650, reflecting a 1.3% increase in the past 24 hours.
