Q3 sees lowest crypto hacks in 3 years, but $440 million lost forever

The number of hackers in the third quarter of 2024 has fallen to its lowest point in three years, with only 28 incidents, in which a total of $463.6 million was stolen.

However, the overall outlook remains worrisome, as there is no chance of recovering more than $440 million in stolen funds.

Worst recovery rates ever

According to the latest report by cybersecurity firm Hacken shared with CryptoPotato, an alarming 95% of stolen funds were permanently lost. This is a stark contrast to previous quarters, when 50-60% of stolen assets were frozen or recovered.

As such, this high rate of unrecovered funds highlighted the urgent need for stronger post-incident response strategies.

“This is the worst quarter in recent times in terms of recovered or frozen funds. Among all the victims, only three projects were able to recover the lost goods. We were hoping that the trend of refunding a percentage of diverted funds, which was common in previous quarters, would continue, but alas!

Looking at losses by region, Asia experienced the highest amount this quarter, with $264 million in losses. Australia followed with $43.3 million, while Europe posted $22.16 million and North America posted losses of $15 million over the same period.

The most damaging type of attack remains when a malicious actor gains control of initial phrases or functions, allowing them to withdraw funds at will from wallets or smart contracts. With eight incidents and $316 million stolen in the third quarter, access control breaches accounted for more than double the percentage of assets lost compared to all other attack types combined.

Next is the re-entry attack which is considered to be one of the most persistent methods to extract assets from a protocol. This involves an attacker exploiting a loop in the withdrawal feature of the smart contract to repeatedly withdraw funds. This attack is particularly harmful to protocols with liquidity pools.

Although there were only three re-entry attacks this quarter, they resulted in more than $33 million in losses across multiple assets.

Evolving threats

While traditional mats have declined, there has been an increase in meme coin launches on platforms like Base, Tron, and Solana. On Solana’s meme coin platform pump.fun, over 2 million coins were launched recently, but only 89 reached $1 million in market cap.

According to Hacken’s report, this indicates that many carpet scammers have moved to these platforms, creating low-value coins that mimic carpet tactics without demonstrating legitimate activity.

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