Attacks on various crypto projects and ecosystems brought millions of dollars to hackers and scammers. According to the recent findings by the Atlas VPN team, blockchain hackers netted nearly $1.3 billion in 78 hack events throughout Q1 2022. In addition, hacks on Ethereum and Solana’s ecosystems attributed to over $1 billion in losses alone during this quarter.
The Ethereum ecosystem lost nearly $636 million to attackers in 18 hack events throughout Q1 2022. The biggest hack of the quarter happened just at the end of March when the Axie Infinity sidechain Ronin Network experienced a security breach. Attackers stole 173,600 Ethereum and 25.5 million USDC worth $610 million. This was described by Chainalysis, which has been tracking the funds associated with the hack, as the largest ever DeFi exploit.
What’s even more interesting is that the hack actually occurred on March 23, and it only came to the attention of the project after a user withdrew 173,600 ETH on March 29.
The Solana ecosystem suffered five hack events and lost $397 million in 2022 Q1. Wormhole, a communication bridge between Solana and other DeFi networks, experienced the second most significant hack of the quarter and lost about $334 million.
Cybercriminals hacked projects in the Binance Smart Chain ecosystem 14 times, accumulating nearly $100 million in losses.
Other types of hacks on blockchain caused almost $57 million in losses throughout 10 events. IRA Financial Trust, which provides self-directed retirement accounts, lost $36 million to a crypto hack.
NFTs remained the top target
NFTs were the top target among cybercriminals with 20 hacks and nearly $49 million in losses. Many scammers are launching NFT projects, which turn out to be rug pull scams. Exchanges were hacked out of $42 million in just three events.
“Blockchain project security should be one of the primary concerns for a person looking to invest in cryptocurrency,” observed Cybersecurity analyst at Atlas VPN Vilius Kardelis. “Most blockchain-related hack events happen because cybercriminals exploit flaws in the project code. A successful hack could cause significant losses to the creators and investors of the crypto platform.”
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Atlas VPN collected its data from Slowmist Hacked, which collates information about disclosed attacks against blockchain projects. Monetary losses were calculated based on the conversion rate of a particular cryptocurrency at the time of the hack or scam event.
Blockchain hacks reach an all-time high
The growing market of cryptocurrencies entices not only legit people interested in the technology but also cybercriminals who want to exploit it. Cryptocurrency projects experienced only five blockchain-related hack events in Q1 2018. Next year, in the first quarter of 2019, hacks increased by 1140% to 62. While in Q1 2020, hacks decreased to 13, in Q1 2021, blockchain-related breaches and scams jumped up by 154% to 33.
Blockchain-related hack events have reached an all-time high of 78 in Q1 2022. It represents a 136% increase in hacks compared to the first quarter of 2021.
Although blockchain is based on sophisticated mathematics and is secure at its foundation with its decentralised approach, there are ways to fool the blockchain to gain advantage. Markets participants need to insure they build security into their solutions from the ground up, always storing keys in a hardware-based solution to avoid those pitfalls and remain protected.