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Crypto Hacks Declining in Q1 Is Only a 'Temporary Respite' — Blockchain Company
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Crypto Hacks Declining in Q1 Is Only a 'Temporary Respite' — Blockchain Company

May 22, 2023

Cautionary statements have indicated that the stolen amount during Q1 2023 closely resembles the figures from Q2 2022, a period that was subsequently marked by an unprecedented surge in hacking incidents.

Despite a notable decrease in crypto hacks during the initial quarter of 2023, the cryptocurrency community is being advised to remain vigilant, as one company cautions that this decline is likely a "temporary respite" rather than a sustained pattern.

In a report released earlier this year, Chainalysis highlighted that the previous year witnessed the highest number of crypto hacking incidents ever recorded, resulting in an estimated $3.8 billion in stolen funds. The majority of these attacks targeted DeFi protocols and were linked to perpetrators associated with North Korea.

Nevertheless, there has been a significant decline in the number of crypto hacks during the initial quarter of 2023. As indicated in a report by TRM Labs on May 21, the total value stolen through crypto hacks in Q1 2023 was "lower than any previous quarter in 2022."

Crypto Hacks Declining in Q1 Is Only a 'Temporary Respite' — Blockchain Company - news

Additionally, it was observed that the average size of hacks decreased by almost 65% when compared to the corresponding period in the previous year.

The average hack size also took a hit in Q1 2023 ­– to USD 10.5 million from nearly USD 30 million in the same quarter of 2022, even as the number of incidents was similar (around 40).

Although there has been a decline, past events indicate that crypto users should not become complacent. According to TRM Labs, crypto hacks experienced a substantial decrease in Q3 2022, only to be followed by a surge in hacking incidents in Q4, ultimately making 2022 a record-breaking year.

"Regrettably, this slowdown is likely to be a temporary respite rather than a long-term trend," TRM Labs stated, cautioning that even a few large-scale attacks could be sufficient to disrupt the current situation and lead to an increase in hacking incidents once more.

Although there is no clear explanation for the decrease, TRM Labs has proposed that the recent actions taken by the U.S. Treasury, such as the sanctioning of cryptocurrency mixer Tornado Cash, and the arrest and charges brought against Avraham Eisenberg, the exploiter of Mango Markets, may have acted as deterrents for potential hackers.

In January, Certik, a blockchain security firm, informed Cointelegraph that they do not expect a decrease in exploits, flash loans, or exit scams.

They emphasized the probability of hackers making additional attempts to target bridges in 2023. These bridges were responsible for six out of the ten largest exploits in 2022, resulting in approximately $1.4 billion being stolen.

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