Web 3.0 participants suffer from cybersecurity threats

Mass cyberattacks are becoming a typical phenomenon for the cryptocurrency community, which causes serious concerns for investors. It is noteworthy that the activities of hackers cause not only financial losses, but also undermine the trust of users. Over the past year, the total capitalization of the global cryptocurrency market reached $2.4 trillion. In parallel, subject matter experts identified 306 incidents in 2022 (26% more compared to 2021) related to cybersecurity segment Web 3.0. Against their background, the total losses of community members exceeded $10 billion.

In the segments of cryptocurrency wallets, exchanges, DeFi and NFT last year there were 136 cyberattacks, resulting in user losses of more than $4 billion. The main types of attacks were: asset theft, vulnerability search, compromise of secret keys and phishing. It is worth noting that some cryptocurrency exchanges hid the hacks for months and even years, which undermined the trust of many users.

More than 40 major platforms have closed over the past 3 years after high-profile exploits. The hacks themselves were often accompanied by the theft of investment funds and it became a common phenomenon. It is noteworthy that on September 12, CoinEx was also subjected to a massive hacker attack. On its background, the criminals managed to steal about $70 million. Exchange specialists reacted promptly. On the same day, the possibility of withdrawing funds was suspended, and the assets were transferred to cold storage. Within the next 48 hours, coordination with peer-to-peer platforms was carried out to freeze the linked funds.

Already on September 14, the exchange released an official statement in which it was confirmed that the main reason for the hack was the compromise of the hot wallet key.

Throughout the process, CoinEx promptly distributed updates via social media, community platforms, and website announcements, keeping users informed every step of the way. The platform eventually overhauled its wallet deployment mechanisms and resumed the ability to withdraw funds.

Compliance with cybersecurity standards requires collective prudence, as the crypto industry still lacks a clear regulatory system compared to the traditional finance sector. Notably, exchanges looking to scale face obstacles in the form of hacker activity and a global bear market trend.

CoinEx’s reliability, transparency, and accountability has clearly demonstrated to other crypto projects how to proceed should they encounter such incidents. The crypto industry is facing clear challenges, against which exchanges need to develop the appropriate qualities to cope with all the trials.

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Hackers stole $2 billion less in 2023

The total amount of money lost to hacker attacks has decreased three times compared to last year. There has been a significant drop in the total amount of funds stolen by hackers from cyberattacks over the past year. According to DefiLlama, there were 75 incidents in 2023 with a total loot of $1 billion. This figure is significantly lower than the previous year, when attackers managed to steal $3.2 billion from 60 attacks. The trend now is toward more frequent, albeit smaller, hacks.

Interestingly, only 11 out of 75 attacks this year have stolen more than $10 million, indicating that hackers prefer smaller but more frequent attacks. This approach, experts say, allows them to remain stealthy and avoid excessive media attention.

Eric Jardine of Chainalysis emphasizes that it is important to remember the unpredictability of hacker attacks. Even if the total volume of production decreases this year, there is a risk of the situation changing due to one or two major incidents.

Experts also note that the decrease in stolen funds is primarily due to market factors, rather than hackers abandoning cryptocurrencies. The volatility of crypto asset prices plays an important role here.

Nevertheless, the crypto market has already been repeatedly criticized due to various incidents. It allows criminals to launder money and even fund illegal programs. Cybersecurity experts warn that the increase in small crimes could be a precursor to larger attacks in the future.

Jake Moore, global cybersecurity advisor at ESET, notes that cryptocurrency storage platforms, although they function like banks, do not guarantee a high level of protection. This is why they are becoming increasingly attractive to hackers.

According to Beosin, damage from hacks, phishing attacks and rag pools in Web3 approached $900 million in the last three months. That’s up from the first half of the year.

Despite the increase in total losses, the number of fraudsters has decreased, according to their data.

Dennis Stets

Gambling expert

Hello, I’m Dennis. With almost 10 years of experience in the online gambling industry (since 2014), I bring a wealth of expertise to the table. My specialization lies in casinos and crypto casinos, where I have honed my skills and knowledge. Throughout my career, I have written extensively on topics ranging from online poker to sports betting, contributing valuable insights to the field. Explore the dynamic world of the gambling industry through my expert materials and stay informed on the latest trends and developments of gambling world.