The cryptocurrency market experienced its most challenging month in 2023, as revealed by a report from Web3 outlet De.Fi, shared with Cointelegraph.
Losses in July amounted to a staggering $486 million, surpassing the total losses from the entire year of 2022 by more than six times.
This alarming trend followed a series of high-profile hacks and exploits that occurred during the month, accompanied by a flurry of legislative activity surrounding the regulation of cryptocurrency and digital assets.
Unfortunately, the recovery efforts for the stolen funds proved insufficient, with only $6.15 million, representing a mere 1% of the total stolen amount, successfully reclaimed.
Researchers at De.Fi expressed their concern over the lack of effective measures to quickly recover lost funds.
They emphasized the critical role played by the cryptocurrency sector in recuperating stolen or lost assets, stating that it is vital in mitigating the adverse effects of such unfortunate incidents.
The report highlighted that the majority of the losses originated from the Ethereum network, accounting for $447 million lost across 36 cases.
Notable incidents included the Multichain hack, which resulted in $231 million in losses, and the Alphapo exploit, causing approximately $100 million in damages.
Following Ethereum, the network with the next highest losses was Base, where a single case led to $23 million being lost.
Binance took third place, reporting a loss of nearly $11 million across 18 cases.
READ MORE: BNB Smart Chain (BSC) Hit by Copycat Attacks
The report attributed the primary cause of the losses in July to “access control issues,” accounting for a significant portion of the funds lost at $364 million.
Additionally, there were over 38 reported cases of “rugpulls,” resulting in approximately $36 million in losses, and reentrancy attacks led to around $78 million in damages.
Despite the concerning statistics, there was a glimmer of positive news in the report:
July saw no reports of exit scams, providing a ray of hope amidst the otherwise bleak scenario.
The De.Fi team’s report underscored the urgency for improved security measures, regulatory efforts, and robust recovery strategies within the cryptocurrency space.
Without prompt and effective action, the market’s vulnerability to hacks and exploits may continue to exacerbate losses and hinder its overall growth and stability.
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