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Crypto heists show resilience of decentralised finance weaknesses

TL;DR

  • In 2023, hackers stole $2 billion in crypto, less than the year before, but DeFi still has issues.
  • Mixin and Euler Finance hacks exposed problems; infrastructure attacks are a big threat.
  • Crypto industry needs better security against evolving threats despite fewer heists.

In the ever-evolving world of crypto, 2023 proved to be a pivotal year as hackers executed heists amounting to approximately $2 billion. This figure, according to De.FI, a leading Web3 security company managing the REKT database, represents a notable decrease from the staggering $3.8 billion reported in the previous year. While the drop is a positive sign, it underscores the ongoing vulnerabilities within the decentralized finance (DeFi) ecosystem.

Mixin hack: A prominent 2023 event

One of the standout events of the year was the high-profile hack at Mixin, a Hong Kong-based cryptocurrency startup, in September. This breach resulted in a jaw-dropping theft of $200 million, sending shockwaves through the crypto community and raising concerns about security measures within the industry.

In March, the cryptocurrency lending platform Euler Finance fell victim to another substantial hack. Hackers managed to gain access and siphoned off over $197 million. This incident further highlighted the vulnerabilities inherent in the cryptocurrency space.

De.FI’s thorough assessment of the $2 billion in losses throughout 2023 reveals that these losses are spread across several instances, pointing to enduring weaknesses in the DeFi ecosystem. 

Despite challenges posed by a bear market in the early part of the year, 2023 showcased the delicate balance between these persisting vulnerabilities and the proactive steps taken to address them.

TRM labs reports $1.7B in stolen cryptocurrency

Supporting this narrative, TRM Labs reported that by mid-December 2023, a total of $1.7 billion in cryptocurrency had been stolen. While this figure represents a decrease from the previous year, it is evident that challenges persist. Prominent thefts against platforms like Atomic Wallet, BonqDAO, Multichain, and Poloniex added to the industry’s woes.

Chainalysis, a leading blockchain surveillance company, took a broader perspective, emphasising the cryptocurrency sector’s vulnerability to online attacks. Despite the decline in the number of heists throughout 2023, the sector remains far from immune to challenges.

One concerning trend that emerged in 2023 was the changing nature of cryptocurrency theft. Nearly 60% of the funds stolen this year can be attributed to infrastructure assaults, specifically targeting the theft of private keys. 

This revelation underscores a critical vulnerability within the industry’s security framework and highlights the urgent need for more robust and sophisticated security measures.

The call for proactive security measures

The lessons learned in 2023 underscore the significance of taking a proactive approach to security in the ever-changing world of cryptocurrency. While progress has been made in mitigating vulnerabilities, the industry’s substantial value demands that it continue strengthening its defences against unforeseen threats in the years ahead.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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James Kinoti

A crypto enthusiast, James finds pleasure in sharing knowledge on fintech, cryptocurrency as well as blockchain and frontier technologies. The latest innovations in the crypto industry, crypto gaming, AI, blockchain technology, and other technologies are his preoccupation. His mission: be on track with transformative applications in various industries.

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