$119 million in stolen crypto so far in 2023, NFT Rug pulls on the Rise: Crystal Blockchain
The year is young, but so far in 2023, hackers have stolen $119 million in crypto in 19 breaches, Crystal Blockchain says in a new report, which includes data ranging from Mt. Gox crypto exchange hack in 2011 until February 18, 2023.
The biggest DeFi hack so far this year was in February of Bonq DAO, a decentralized lending protocol. Hackers compromised the protocol’s smart contract and manipulated the price of allianceBlock tokens, draining around $88 million worth of crypto from the protocol.
The second largest DeFi-related attack was on the Platypus Finance protocol, which issues the stablecoin USP. A flash loan attack in February led to the depegging of the stablecoin and a loss of around $9 million in user funds. But unlike many similar incidents, this one ended relatively well: the protocol was able to partially refund users and the investigators traced the hackers’ wallets to the yjr Binance exchange, found out who they were and arrested two people in France.
The report noted that in the largest phishing attack so far this year, non-fungible token (NFT) collector Kevin Rose lost around $1 million in NFTs after his personal wallet was compromised in late January.
Most of the attacks have targeted vulnerabilities in the code and design of decentralized protocols, reflecting a larger trend in the game since 2021: Decentralized finance (DeFi) has been much more popular with hackers than centralized exchanges (CEX).
DeFi protocols were hacked 13 times more than centralized in 2022, according to Crystal. The largest was an attack on the Ronin cross-chain bridge in March 2022, where $625 million worth of tokens were stolen.
Last year, $4.17 billion was stolen in 199 incidents, the firm said, a higher estimate than Chainalysis’ data showing $3.8 billion was stolen in 2022. Over time, as more information about criminal activity emerges, these estimates grow, Chainalysis said when it released the data in February.
Crystal also found a growing trend of NFT carpet scams, when project founders disappear with users’ funds. In 2022, 48 such fraud attempts occurred, 41 of which took place in the second half of the year, the report states.
Since 2011, more than $16.7 billion worth of cryptocurrency has disappeared in various hacks and scams. US-based companies and projects appear to be targeted most often. But China is home to the most value lost to fraud, with $2.25 billion stolen in 2019 from investors in the infamous PlusToken Ponzi scheme and $1.1 billion defrauded by the WoToken scam in 2020, Crystal says.
