Crypto losses from hacks and scams surged in the second quarter of 2024, more than doubling from the same period the previous year, as reported by blockchain security platform Immunefi.
Losses totaled over $572 million in Q2 2024, a significant increase from $220 million in Q2 2023. Centralized exchange hacks were the primary contributors to these losses.
Before Q2, losses from hacks and scams had been decreasing, with Immunefi noting a 23% reduction in Q1.
This downward trend continued through April and most of May, but the situation worsened dramatically at the end of May and in June.
The most significant loss during the quarter was the May 31 private key hack of crypto exchange DMM, resulting in $305 million worth of Bitcoin being stolen.
Another major incident was the BtcTurk hack on June 22, which caused $55 million in losses. Combined, these two hacks accounted for over 62% of the total losses for the quarter.
Centralized protocols and exchanges experienced approximately $401 million in losses during Q2, making up 70% of the total.
Despite this large financial impact, only five successful attacks were recorded against centralized protocols. In contrast, decentralized protocols faced 62 successful exploits or scams.
Decentralized finance protocols suffered $171 million in losses during the quarter, a 25% decrease from Q2 2023.
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Ethereum and the BNB Smart Chain remained the top two targets for hackers and scammers, responsible for 71% of total losses.
There is also growing evidence that Ethereum layer 2 networks are becoming more popular targets for malicious activities.
Arbitrum was the third most targeted network, suffering four incidents and accounting for 5.5% of the total losses.
Blast and Optimism each faced three incidents, while other networks collectively accounted for 15% of the total losses.
Immunefi founder Mitchell Amador emphasized the importance of centralized exchange security, stating: “This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages. Robust measures to safeguard the entirety of the ecosystem are crucial.”
Some stolen funds were later recovered by security researchers.
For instance, the attacker who exploited the Gala Games protocol returned nearly all the stolen funds, reportedly due to exposing his IP address.
Alex Labs, Bloom, and Yolo Games also recovered most of their lost funds, with recovered funds representing 5% of the total losses in the quarter.
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