In a promising development for the cryptocurrency community, losses from fraud and hacks dropped by 12% in May 2024 compared to the same period last year, according to a recent report from blockchain security firm Immunefi. The month saw $52 million in losses, a significant reduction from the $59 million reported in May 2023. This decline also marks a notable 28% decrease from the losses recorded in April 2024.
Continued Decline in Crypto-Related Losses
The latest figures from Immunefi highlight a continuing trend of diminishing losses due to cyber-attacks in the Web3 space. This follows a previous report from March indicating a 23% year-over-year decline in Q1 2024 losses. April also saw its lowest monthly losses ever, as reported by blockchain security company CertiK.
Major Incidents Driving the Losses
The majority of May’s losses were attributed to two significant incidents. The first involved a hack of the Web3 gaming protocol Gala Games, resulting in a $21 million loss. The second major attack targeted Sonne Finance via a smart contract exploit, causing $20 million in damages. Together, these two events accounted for 78% of the total losses for the month.
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Primary Targets: Ethereum and BNB Smart Chain
Ethereum and BNB Smart Chain emerged as the primary targets for attackers in May, encompassing 62% of all reported attacks. Interestingly, all the attacks were directed at decentralized protocols, with no centralized exchanges reporting any losses from hacks or exploits.
Fraud Remains a Smaller Fraction of Losses
While fraud continues to plague the cryptocurrency sector, its impact remains relatively minor compared to hacks. In May, fraud accounted for only $1.7 million, or 13.6%, of the total losses. The bulk of the financial damage stemmed from hacks and exploits, reinforcing the need for robust security measures within decentralized systems.
Advancements in Security Technology
Although Immunefi did not provide an analysis for the overall reduction in losses, the trend is consistent with observations from previous years. Experts have attributed these declines to advancements in security technologies and improved law enforcement practices. In April, cybersecurity firm Blockaid noted that its software had successfully mitigated some threats, leading to the shutdown of certain crypto-draining operations.
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