The last quarter was this year’s worst in terms of dollars lost to hacks and frauds, says a new report.
Crypto investors lost $685.5 million in Q3 2023, up 59% from $428 million year-over-year, according to a report by Immunefi, a bug bounty and security services platform, shared with Decrypt.
The stolen amount marks a 55.7% increase from Q1 2023 and a 158.2% surge compared to the second quarter.
Two hacks in Mixin Network and Multichain accounted for nearly half of the total amount stolen, with a total of $326 million between them.
Moreover, in Q1 2023, 40.5% of the stolen amount was recovered through two specific instances Euler Finance and SperaxUSD.
The recovery rate fell dramatically this past quarter to 8.9% of the total losses in Q3 2023, with only $61.1 million having been recovered.
North Korean hacker cell Lazarus Group was responsible for $208,600,000 stolen, representing 30% of the total losses in Q3 2023, in Immunefi’s report.
The group was allegedly behind the high-profile attacks on CoinEx, Alphapo, Stake, and CoinsPaid.
“State-backed actors played a crucial role as they were allegedly behind several cases this quarter. Their particular focus on CeFi led to a sharp surge in losses within this sector,” said Mitchell Amador, Founder and CEO at Immunefi, referring to attacks by the Lazarus group.
High-activity chains are ‘prime targets’
The DeFi sector was hit worse than its centralized counterparts, with DeFi representing 72.9% of the total losses, while CeFi hacks like CoinEx and Aplhapo accounted for 27.1% of the total.
Ethereum, BNB Chain, and Coinbase-incubated Base blockchain were among the “top of targeted chains” by hackers.
An Immunefi analyst told Decrypt that bad actors target blockchains where “more funds are at stake and the activity is high.”
Airdrop farming hype across “new networks and token releases” has also made these new chains “prime targets” for “fraudulent schemes such as rug pulls,” Immunefi analysts added.
Airdrop farming is a strategy used by crypto users to receive tokens from a new blockchain or application, distributed to community members retroactively.
A rug pull is a scam event where a team developing or managing a project steals users' funds deposited into the project’s liquidity pools.
The number of incidents rose from 63 in the last quarter and 73 in Q1 to 76 independent incidents in Q3 2023.
The number also marked an increase of 153% year-over-year.