A more than 50% decrease from the over $8 billion stolen in 2021, the crypto sector lost about $4 billion in digital assets to hacks, fraud, scams, and rug pulls last year.
The crypto industry lost $3,9 billion in 2022, according to a recent analysis by Immunefi, a platform for bug bounties and security services for the Web3 ecosystem. Five major attacks, totalling $2,361,000,000 alone, accounted for 59.8% of all yearly losses.
The overwhelming majority of crypto losses in 2022 were caused by hacking, among several other illegal activities. More specifically, nearly $3. 7 billion, or more than 95% of all crypto lost in the year, was stolen by hackers. Merely 4.4% of the losses were likely related to fraud, scams, and rug pull. The report stated:
“DeFi continued to be the primary target of successful exploits in 2022, accounting for 80.5% of all losses compared to CeFi’s 19.5%. DeFi has encountered a loss of $3,180,023,103 in 2022 over 155 incidents. In comparison to 2021, when DeFi lost $2,036,015,896 in 107 incidents, this figure indicates a 56.2% increase.”
Overall, 2022 might be considered one of the worst years for the crypto ecosystem because both centralized and decentralized financial systems (DeFi and CeFi) saw major catastrophic events. The Terra/LUNA ecosystem collapsed in May, and the prominent cryptocurrency exchange FTX collapsed in early November, which is two of the more notable examples.
With 65 and 49 incidents, respectively, Binance’s native blockchain BNB Chain and Ethereum were the two most often targeted blockchains in 2017.BNB Chain and Ethereum together accounted for 63.3% of all blockchain attacks. With 12 incidents or 6.7% of all attacks, FTX-backed Solana was the third most frequently targeted chain in 2022.
It’s essential to mention that some of the stolen funds were also recovered last year. “A total of $204,157,000 in stolen funds has been recovered in 12 distinct instances. This figure only accounts for 5.2% of all losses in 2022 “stated the report.
The largest cryptocurrency hack of 2022 was the hacking of approximately $625 million worth of Ethereum and USDC from Axie Infinity’s Ronin blockchain. This was followed by fraudsters totalling $326 million from Wormhole, $190 million from Nomad, $570 million from BNB Chain, and $650 million from FTX, which together make up 60% of all cryptocurrency losses in 2022.
“The community suffered losses in 2022, highlighting the importance of prioritizing security and putting effective measures in place by 2023. We can safeguard the community from harm and increase trust in the industry by proactively identifying and correcting vulnerabilities.”
Also Read: What To Expect From Crypto In 2023