• Blockchain security firms only recovered about $133 million in 2022, while in 2023, experts traced and recovered $674 million.

• According to PeckShield, the 2023 crypto hacks led to a loss of at least $2.61 billion, excluding multichain losses.

• According to the firm, 2023 showcased a 25% reduction in laundered funds from $460 million in 2022 to $342 million.

Blockchain technology has ushered in an entirely new approach to technology. Decentralization and its numerous benefits have significantly grown over the past decade.

Organizations, entrepreneurs, and startups have focused on decentralized applications, especially DeFi. The web3 franchise has grown exponentially, leading to a new industrial revolution and overhauling the digital transformation of many regions.

Unfortunately, despite its unprecedented rise, developers are still exploring the extent of its applications. This broadens the technology’s capabilities but also leaves room for many loopholes.

In the past decade, hackers and scammers have thrived within the Web3 industry, causing millions of losses. For instance, these groups’ most affected Web3 pillar is the crypto industry. In 2022, security analysts and hackers tested the boundaries of crypto securities, resulting in a loss of at least $3.7 billion. 

PeckShield, a renowned blockchain security firm, recently released its findings after surveying 2023 crypto hacks. According to the firm, the losses in 2022 have built the groundwork for improved crypto security in 2023. In their latest reports, security analysts and firms have successfully recovered at least $674 million from crypto scams and hacks.

PeckShield praises recent efforts to thwart scams

The crypto industry is blockchain technology’s first practical use case and Web3’s most successful pillar. The franchise created a new financial system known as a decentralized finance system.

Since the Golden Age of Bitcoin, developers, investors, startups, and innovators have duplicated and improved their fundamental workings to create breakthroughs in the financial sector.

Unfortunately, crypto security is still as new as the system it protects. Over the years, the industry has lost billions from crypto scams like OneCoin or the MT Gox hack.

To some extent, many claim the FTX crash was one of the biggest web3 scams since the industry’s founding. All in all, scams are a significant part of the industry. In addition, the lack of awareness of the sector leads many to believe it is a get-rich-quick scheme allowing perpetrators to profit from the naivety of new users.

Thus, plenty of blockchain security firms have dedicated their time, resources, and ingenuity to improving security. One such firm, PeckShield, has recently backtracked the progress of the 2023 crypto year, identifying key factors hinting at a steady improvement security-wise. 

According to PeckShield, the 2023 crypto hacks led to a loss of at least $2.61 billion, excluding multichain losses. Despite this staggering figure, the blockchain firm announced a slight improvement in Web3 security. Compared to 2022, the losses experienced from the 2023 crypto represented a 27.78% decrease.

Furthermore, in 2022, blockchain security firms only recovered about $133 million, while in 2023, experts traced and recovered $674 million from more than 600 large-scale crypto scams and hacks. This figure equated to 25% of the total crypto stolen, representing an improvement in countermeasures used and response time.

Also, Read South Africa experiences a roll of crypto scams targeting young minds.

In an interview, its team stated that the funds’ recovery resulted from more active negotiations with hackers and a rise in bug bounty programs.

They said, “Engaging in active negotiations with hackers can lead to the return of stolen funds. […] Implementing bug bounty programs or on-chain sleuthing to identify hackers and vulnerabilities in the system can enhance security.“

This eventually paid off, and the majority of the funds were recovered. Apart from highlighting the 2023 crypto hacks, the blockchain security film highlighted various data points like flash loans, decentralized finance (DeFi), and the volume difference between hacks and scams.

Their finding showcased that among the significant crypto scams and hacks in 2023, 40% involved flash loan attacks. In addressing security flaws, the firm also identified another improvement in DeFi security, vital in the amount of crypto stolen.

In an interview, CertiK co-founder Ronghui Gu highlighted the steady improvement in crypto security, especially amid the legal crackdown on exchanges. The execution also highlights the growth of the bounty platform and proactive blockchain security measures that will be in place in 2024.

The 2023 crypto hack report also featured a section of stolen funds launched throughout the year. According to the firm, 2023 showcased a 25% reduction in laundered funds from $460 million in 2022 to $342 million.

Unfortunately, it also highlighted how 67% of the losses in 2023 happened in DeFi, while 33% occurred in centralized finances, underscoring that 58% occurred via hacks and 42% via scams.

These claims shed light on the progressing world of blockchain and crypto security. Since 2018, PeckShield has continued to try to redefine the world of blockchain by establishing impenetrable security systems. The organization provides comprehensive security audits on smart contracts, DeFi, exchange, wallet, and blockchain security.

In addition, they provide threat monitoring and prevention, penetration testing, and emergency response. Top exchanges like Polygon, BNB Chain, Bancor, 1inch, OKChain, dYdX, and others continue to utilize Peck Shield’s services to promote their global reach.

With the anticipated crypto bull run looming, the blockchain security firm has cautioned users about an unprecedented rise in crypto scams. Thus, PeckShield has urged users to maintain vigilance when handling the 2024 crypto market and only interact with exchanges that have extensive backtracks on security and performance.

Also, Read Web3 Awareness Grows as University of Zimbabwe Hosts Blockchain Hackathon.