Crypto losses reach $428 million in Q3 globally. Who’s to blame?

Hackers are constantly coming up with sophisticated ways to steal money or personal data. If earlier everyone was convinced that hackers could not get close to the digital currencies traded by various users, then the latest news suggests otherwise.

This year’s recent Q3 report showed that the world is facing huge losses associated with cryptocurrencies. Losses reached four hundred and twenty million dollars during the period indicated. This figure is much less than in the previous quarter. In percentage terms, this indicator fell by thirty-six percent. However, the report shows that the losses are due to increased hacker attacks as well as fraud.

The leading bug bounty platform, Immunefi, has conducted a thorough study of the losses associated with digital currencies and has come up with less than positive conclusions. According to the analysis, over the period, fraud cases account for seven percent, while hacks account for ninety-three percent.

The concept of a new, third generation of the Internet, which is decentralized, and also works based on the blockchain and the economy of tokens, was estimated at three trillion dollars in the previous year. Billions of dollars are still locked up in various smart contracts. This makes them a sweet spot for various scammers and hackers who come up with advanced schemes to get access to this money.

The experts who conducted the study found that in thirty specific cases, losses reached three hundred and ninety-nine million dollars due to hackers. In the other nine cases, losses amounted to twenty-ten million dollars due to the tricks of fraudsters. Huge losses were directly related to 2 well-known projects: Nomad Bridge, as well as Wintermute.

During the specified period of this year, centralized finance is subject to a much smaller number of different attacks. Decentralized finance is being attacked much more. According to studies, almost 99% of losses are related to decentralized finance. At the same time, slightly more than one percent are losses associated with centralized financing.

It is also worth noting that there are two most commonly attacked platforms. To date, these platforms are BNB Chain, as well as Ethereum. The first platform faced the most attacks in the third quarter of this year. Sixteen cases of attacks were recorded, which accounted for almost 29% of the total number of losses. On the second platform, thirteen cases of attacks were recorded, which is slightly more than 23% of the total losses.

DeFi security issues

The concept of decentralized finance is relatively new. Many people around the world are just beginning to learn more about the opportunities offered by this industry. The first smartcontracts that could be executed through the Ethereum platform appeared only 8 years ago. Precisely because the concept is fairly new, the security problem remains acute today.

Every day, users read a lot of news related to the world of cryptocurrencies, as well as decentralized finance. Users read trusted sources like Buidlbee to get the latest breaking industry news as well as tips on using cryptocurrencies. It is not uncommon to see news related to DeFi issues, which raises a lot of concerns.

Unlike conventional financial services, the security of smart contracts requires much more careful attention. The problem is that transactions made are irreversible and hackers are constantly coming up with new ways to cover their tracks so they can’t be traced. Given that many users own a huge number of digital currencies, the value of which is equivalent to hundreds of thousands and millions of dollars, fraudsters and hackers need only find one loophole to gain access to them. After that, many hackers disappear without a trace and continue to improve their methods.

Developers of various platforms are often in a hurry to create new platforms, as well as introduce new and improved features that are designed to make life easier for users. However, due to the rush, they fail to make sure that the platform is 100% secure. Often, projects are not properly audited, and they also pass less testing.

Because of this, users, both because of their own mistakes and because of the mistakes of developers, suffer huge losses. The task of decentralized finance, first of all, is to make sure that both old projects and new ones are safe. Only in this case, it will be possible to avoid crypto losses in such quantities as for the second and third quarters of this year.

About the author

Saman Iqbal

Saman is a law student. She enjoys writing about tech, politics and the world in general. She's an avid reader and writes fictional prose in her free time.

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