A blockchain security company called SlowMist released a report on July 7th stating that over $30 billion worth of cryptocurrencies have been compromised in 1,101 recorded incidents from 2012 to the present. These losses make up about 2.5% of the total value of cryptocurrencies on the market right now.
The top five most frequent hacking techniques, according to SlowMist, include rug pulls, flash loan assaults, scams, private key breaches, and weaknesses in smart contracts. These flaws have been used to trick consumers and obtain illegal access to funds.
Out of all the instances, 118 were directed at cryptocurrency exchanges, 217 involved the Ethereum environment, 162 involved the Binance Smart Chain ecosystem, 119 involved the EOS ecosystem, and 85 involved nonfungible tokens (NFTs). Exchange hacks accounted for the highest losses, with over $10 billion lost over the past decade.
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Related: 50% of stolen NFTs are sold within 3 hours says PeckShield
According to the report, hacking incidents with losses of over $1 billion were most common in the early 2010s and between 2019 and 2021. However, since 2022, there have been comparatively fewer security incidents, which is consistent with previous investigations’ conclusions.
Early cryptocurrency attacks of note include the infamous Mt. Gox hack of 2014 and the Bitfinex hack of 2016. Mt. Gox, previously the biggest Bitcoin exchange in the world, declared bankruptcy in 2014 after learning that 850,000 BTC (worth $25.2 billion at the time) had been stolen over a period of years through covert hacks and siphoning. Since then, the exchange has collected 200,000 BTC, totaling $6.1 billion, and is distributing them to creditors.
A security compromise at Bitfinex in 2016 led to the loss of 119,576 BTC, which at the time was worth approximately $70 million but is now worth $3.7 billion. However, as part of their continued efforts to combat cryptocurrency-related crimes, special agents from the US Department of Justice were successful in recovering 94,000 stolen BTC on February 8, 2022.
These examples show the weaknesses and dangers of owning and dealing in cryptocurrency. The sophistication and frequency of hacking efforts have increased in tandem with the cryptocurrency industry. This emphasizes the significance of strong security measures and raised user awareness to safeguard their digital assets.
Related: Crypto Hacks, Rug Pulls, and Scams Cost Investors $656M in H1 2023
Despite a minor decline in the frequency of security breaches in recent years, continual vigilance and upgrades to security measures are still essential to reduce risks and safeguard user assets in the bitcoin ecosystem.