The crypto space has seen its fair share of exploits and hacks. In March 2022, the industry witnessed one of the largest heists. The Ronin Bridge of the Axie Infinity game was breached and attackers made nearly $600 million off it. The US government pointed the finger at the Lazarus group in North Korea. In addition, a recent disclosure shows that a fake vacancy could have made the exploit possible.
According to CertiK’s Web3 Security Quarterly Reportmore than $2 billion was siphoned off from hacks and exploits in Q1 and Q2 of 2022. Of this, $802 million was stolen in Q2.
Crypto Plagued by Hacks and Exploits?
According to the report, $308.5 million was lost as a result of flash loan attacks. Flash loans are a new financing mechanism where borrowers can access large amounts of crypto for a very short period of time. This mechanism is sometimes used for malicious purposes. This includes manipulating the value of a token or buying up a majority of a given project’s governance tokens. CertiK’s report paid a lot of attention to this type of attack.
In addition, phishing attacks in crypto have increased 170% since the last quarter. CertiK reports that most phishing attacks take place on social platforms such as Discord and Telegram, and this is consistent with what was found regarding the fake job posting that led to the Ronin hack. Unlike some other major social media platforms, Discord and Telegram do not have a verification process, which allows malicious players to copy accounts of prominent people or projects, preying on innocent investors. Bored Ape Yacht Club (BAYC) was the victim of a hack on Discord in June 2022, losing 200 ETH.
something positive
CertiK’s report paints a grim picture of the crypto space. It does, however, provide some optimism. The report says the loss of hacks has fallen by 42%. But the information admits that the data is skewed due to the massive Ronin hack of Q1.
In addition, the report mentioned that carpet pullers are not as standard as before. Nevertheless, this could be due to the bearish sentiment looming over the market. $37.46 million was stolen in carpet pulls, down 16.5% from the previous quarter.
Regardless of the hurdles, there is a silver lining to all exploits in the industry. In addition, crypto scams have gotten lower every year. And finally, the industry is relatively new. Innovations are regularly being developed to address such issues, and it is only time for crypto security to get its game going.