Crypto Hacks Skyrocket: Q3 Sees 153% Surge, $685 Million in Losses

Blockchain security company ImmuneFi has released a report revealing a sharp rise of 153% in cryptocurrency hacking incidents during the third quarter of this year when compared to the same period in 2022. The number of reported incidents surged from 30 to 76 in Q3.

Losses stemming from hacks and fraudulent activities also experienced a notable increase, surpassing $685 million in Q3. This marks a 60% escalation from the approximately $429 million reported during the corresponding period last year.

Mitchell Amador, CEO of ImmuneFi, commented on the situation, stating, “Q3 has seen the highest losses this year, primarily driven by significant attacks, such as those targeting Mixin Network and Multichain. Notably, state-backed entities are suspected to have played a pivotal role in several cases during this quarter.”

Two major security breaches dominated the landscape, with the theft of $200 million from Mixin Network and $126 million from Multichain accounting for nearly half of the total losses in the quarter. South Korean authorities have attributed the Mixin hack to North Korean-sponsored hackers, specifically the Lazarus Group.

The Lazarus Group has been linked to several substantial breaches during the quarter, including those involving crypto exchanges such as CoinEx, Alphapo, and Stake, along with the digital payment company CoinsPaid, resulting in a combined loss exceeding $200 million.

Hacking incidents overwhelmingly contributed to the losses, comprising 97% of the total, while frauds and scams accounted for just 3%. Decentralized finance (DeFi) protocols bore the brunt of the damage, with losses nearing $500 million, as opposed to the over $185 million stolen from centralized exchanges and services.

The surge in these incidents underscores the growing sophistication of hacking groups targeting blockchain projects and underscores the intricate nature of the smart contract code that underlies many DeFi applications.