Cryptocurrency Industry Faces Security Crisis
In July 2024, the cryptocurrency industry experienced a significant security crisis, with hackers executing 16 major breaches that resulted in the theft of approximately $266 million in assets. This marked a worrying trend as the number of cases in July surpassed the losses seen in June, which amounted to $176 million.
Major Breaches and Victims
One of the most notable attacks occurred on July 18th when Indian exchange WazirX was breached, leading to losses exceeding $230 million, making up 86.4% of the total losses that month. Investigations suggested the involvement of North Korean cybercriminals in this massive hacking incident.
Aside from WazirX, other significant casualties in July included Compound Finance ($24 million loss), Li.Fi bridging protocol ($10 million loss), Bittensor decentralized AI protocol, and Rho Markets liquidity provider (both experiencing losses of $8 million).
It was noted that many stolen assets were moved through the cryptocurrency mixer Tornado Cash, a common tactic to disguise the origin of stolen funds and avoid detection.
Terra Blockchain Security Incident
At the end of July, the Terra blockchain encountered a major security breach where hackers exploited known vulnerabilities to steal 60 million ASTRO tokens, $500,000, $3.5 million in coins, and 2.7 Bitcoins, resulting in a total loss of $6 million. This attack led to a temporary halt in Terra’s operations, prompting developers to swiftly perform an emergency chain upgrade to resume block production.
The Terra team ensured that validators with more than 67% of the voting power updated their nodes to prevent future vulnerabilities, with other validators expected to follow suit in securing the network.
Deddy Lavid, the co-founder and CEO of Web3 security company Cyvers, highlighted the evolving nature of hacker targets in 2024, emphasizing the growing focus on smart-contract-based projects.
Record Recovery Rates and Ongoing Threat
Despite the surge in hacks and scams, the cryptocurrency market displayed resilience as the recovery rate of stolen funds reached a record 77% in the second quarter of 2024. Hacken’s Q2 2024 Web3 Security Report revealed that out of the $512.9 million lost to theft, $347.4 million had been successfully recovered or frozen, providing hope amid concerning theft rates.
However, the threat of cryptocurrency scams persists, with platforms like X (formerly Twitter) remaining hotspots for fraudulent activities. Scam Sniffer, a web3 anti-fraud company, indicated that nearly $50 million is lost monthly due to account impersonation on the platform.
These recent cryptocurrency thefts underscore the importance of enhanced security measures and continued vigilance within the industry to protect assets and combat cyber threats effectively.
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