Web3 protocol losses to hacks and exploits during the second quarter fell 58% to $313.5 million from $745 million stolen around the same period last year, according to a CertiK report shared with CryptoSlate.
“The drop in money lost to cybersecurity breaches suggests that the Web3 industry’s technical defenses and security protocols are becoming more effective,” CertiK told WebMD. CryptoSlate in a statement. “Cryptocurrency exchanges, blockchain networks and individual developers are likely to implement more robust security measures and invest in areas such as threat detection, vulnerability management and incident response.”
Compared to the first quarter of this year, total losses represent a slight decrease from the $330 million recorded.
In the second quarter of 2023, there were 212 incidents with an average loss of $1.5 million
The CertiK report said there were 212 security incidents in the second quarter, resulting in an average loss of $1.5 million.
April and June were particularly busy for the bad guys, according to the report, as both months recorded more than 70 incidents leading to more than $100 million in losses, respectively.
Meanwhile, May saw the fewest number of exploits at 63 incidents, and losses were pegged at $74.6 million.
Increase in exit scams
CertiK reported that most security incidents in the second quarter were exit scams, also known as back pulls. A back pull is a scam where a team unexpectedly exits the project and sells all of its liquidity after accepting money from investors.
During the period, bad actors pulled back 98 projects to steal $70.35 million. This represents more than double the $31 million lost to the same scam in the first quarter.
Some of the key exit scams of the quarter include Morgan DF Fintoch, which stole more than $30 million, and Ordinals Finance and Chibi Finance, which stole about $1 million, respectively.
Meanwhile, flash loans/oracle manipulation were responsible for 54 incidents and $23.7 million stolen. Security breaches tagged as “other” resulted in a loss of $219.5 million.
Malicious players target BNB Chain projects
On blockchain networks, the CertiK report noted that crypto projects on the BNB chain are increasingly becoming attractive targets for exploits. The blockchain security firm stated that 119 security incidents involving the network resulted in $70.7 million.
By comparison, Ethereum (ETH) recorded 55 security breaches, leading to $66 million in losses. Arbitrum saw 14 exploits with a loss of $14.1 million, and the five exploits on Multichain resulted in a loss of $10.2 million. Avalanche (AVAX) and Polygon (MATIC) recorded five incidents that resulted in $2.4 million in losses.
However, $150.3 million was stolen from other chains and off-chain events in 19 incidents. Atomic Wallet’s $100 million exploit is responsible for most of this loss, and it’s also the top individual exploit in the quarter.
