Crypto Projects Lose Nearly $900M To Hacks, Exploits In Q3 – Report

• The blockchain security firm has revealed in its Global Web3 Security Report that crypto projects lost nearly $889 million to hacks, phishing scams, and rug pulls during the third quarter.
• According to the report, crypto investors lost $282.96 million to rug pulls across 81 incidents, as phishing schemes generated $66.15 million in ill-gotten gains during the same quarter.
• The blockchain security firm revealed that nearly half of the projects that were hacked during the period were unaudited.

This year, the crypto space has encountered several hacks and phishing scams, leading to various projects losing millions in the third quarter. A blockchain security firm, Beosin, has revealed in its Global Web3 Security Report that crypto projects have lost almost $889 million to hacks, phishing scams, and rug pulls during the third quarter.

The report has further elaborated that crypto investors lost $282.96 million to rug pulls across 81 incidents. On the other hand, phishing schemes generated $66.15 million in ill-gotten gains during the same quarter.

One of the major hits came from hacks where around 43 crypto projects underwent security breaches, leading to a loss of $540.16 million. During this period, various media outlets highlighted the notable different hacks of crypto projects. Some of these hacks included the $200 million hack of Mixin Network, the $73 million exploit of Curve Finance, and the $8 million HTX lost to a hot wallet compromise. 

This marks a significant upsurge compared to the cumulative losses of the year’s first half, totaling $330 million during the first quarter and slightly increasing to $333 million by the year’s second quarter. 

Malicious Players Targeting Defi Projects

However, the blockchain security firm noted that decentralized finance (DeFi) projects suffered the most hacks during the period, with around 67% of the breaches targeting platforms in the sector. It is worth noting that other sectors, including blockchains, payment platforms, exchanges, casinos, and infrastructure, also faced hacking incidents during the period.

Source: Beosin

Regardless of the malicious player’s penchant for targeting DeFi projects, public blockchains recorded the highest monetary loss because of the $200 million breach of Mixin Network. This breach recorded about 37% of the total losses for the quarter and is the most significant crypto loss of this year.

Meanwhile, Beosin highlighted that the Ethereum blockchain suffered the most losses and incidents during the period. The blockchain security firm said,

“Ranked by number of attacks, the top 5 chains with the most security incidents were: Ethereum (16 times), BNB Chain (10 times), Arbitrum (3 times), BTC (2 times), and Base (2 times).”

Beosin noted that nearly half of the attacked projects (46.5%) had not undergone security audits. Notably, about 14 (63.6%) of the 22 projects suffered from contract vulnerabilities since they had not been audited. 

This indicates that most of the attacks could have been prevented. This could have been possible if the crypto projects had taken the necessary precautions to conduct audits and address vulnerabilities. 

However, despite all the efforts to recover the lost funds, only 10% of the stolen funds have been successfully recovered. This leaves approximately $800 million unaccounted for, underscoring the challenges of retrieving stolen crypto assets.