Bitrabo Editorial
In the third quarter of 2024, losses from cryptocurrency hacks and fraud incidents saw a decline, with Ethereum (ETH) continuing to be the primary target for attackers, as revealed in a recent report by Immunefi.
Centralized Exchange Hacks Drive Losses
Immunefi’s Q3 2024 analysis highlights the intricacies of cryptocurrency-related thefts and losses. It identifies two significant exchange breaches—WazirX in July and BingX in September 2024—which together represented 69.5% of all funds lost during the quarter, amounting to a staggering $287 million.
Both exchanges are centralized, suffering losses of $235 million from WazirX and $52 million from BingX. Overall, centralized finance (CeFi) platforms accounted for 74.8% of successful exploits in this time frame, while decentralized finance (DeFi) platforms made up the remaining 25.2% of losses.
Interestingly, despite only three recorded incidents at CeFi platforms, the total loss reached $309 million in Q3 2024. On the flip side, DeFi platforms faced $104 million in losses across 31 incidents. When looking back to Q3 2023, DeFi losses have significantly reduced by 79.2%, whereas CeFi losses have increased by 66.4%.
Mitchell Amador, Founder and CEO at Immunefi, provided insights on the differences between incidents targeting CeFi and DeFi:
We’re observing that while DeFi experiences a higher frequency of incidents, CeFi typically endures fewer attacks but with far more severe outcomes, with millions lost in single exploitations. The main challenge for CeFi lies in private key management, which is crucial for maintaining control over crypto assets but often lacks proper security assessments. It calls for meticulous key management practices along with emergency protocols.
The report also compares losses from hacks and frauds, noting a significant reduction compared to Q3 2023, with crypto hack losses down by 38.2% and fraud-related losses decreased by 86.4% in Q3 2024.
Ethereum: Hackers’ Preferred Blockchain
Ethereum and Binance Chain (BNB) stood out as the primary smart contract platforms targeted in Q3 2024. Ethereum faced 15 incidents, which made up 44.1% of total losses among targeted networks, while Binance Chain accounted for 23.5% with 8 incidents.
Coinbase’s Base chain ranked third, comprising 5.9% of losses among various blockchains. Other blockchains like Blast (BLAST), Solana (SOL), and Ethereum’s layer-2 scaling solution Arbitrum (ARB) also faced individual attacks.
These attacks on layer-2 scaling solutions are not surprising due to their relatively new status and insufficient security frameworks. Emin Gün Sirer, co-founder of Avalanche (AVAX), previously expressed concerns over potential threats in emerging layer-2 projects.
The rise in hacking activities underscores the importance of ethical hackers, both white-hat and gray-hat. A recent incident with the DeFi protocol Rho Markets exemplifies this trend. As of the latest updates, Bitcoin (BTC) is trading at $64,650, reflecting a 1.3% increase in the past 24 hours.