Author: Slava Demchuk, CryptoSlate; Compiler: Deng Tong, Golden Finance
In January 2024 alone, cryptocurrency projects lost $127 million due to hackers and fraud. Six times that in January and three times that in December last year. Meanwhile, the crypto industry’s losses from breaches have more than halved in 2023 compared to 2022. Should we expect this decline to continue – or are we on the brink of a new scam explosion?
The number of cryptocurrency scams has declined
Data from TRM Labs shows that from 2023 From January to November 2020, cybercriminals stole approximately $1.7 billion in 160 attacks, and this number will reach nearly $4 billion in 2022. Chainalysis reported similar figures, adding that the number of cryptocurrency fraud proceeds decreased by 29.2% by the end of 2023. The organization noted that illegal trading volumes fell for the first time since 2020.
Factors for the decline in hacking
The following three key factors may help reduce the losses caused by hacking attacks in the crypto industry in 2023:
Enhanced security measures, including real-time transaction monitoring and anomaly detection systems;
Intensified law enforcement efforts around the world to deal with cybercrimes involving digital currencies;
Intensified industry coordination, cryptocurrency exchanges, wallet providers and blockchain networks more actively Share information about vulnerabilities and threats.
As DeFi protocols become more secure, major hacking groups have experienced a decrease in revenue. For example, the notorious Lazarus and Kimsuky groups saw their revenue drop from $1.7 billion in 2023 to $1 billion in 2023, despite an increase in the number of platforms they attack.
Market Cycles and Crypto Scams
Since 2021, thereduction in cryptocurrency scams and Reduced market activity. We’ve been struggling to emerge from a cryptocurrency winter for the past two years, and people are very cautious about their money. Conversely, a bull market is when large numbers of users fear missing out and are therefore easily fooled by fraudulent advice that promises quick returns.
The BTC halving will be a major factor in bullish sentiment in 2024. We've seenit's translating into one of the biggest expected airdrop seasons . Therefore, the number of people being phished by fake airdrop websites is increasing. As the market recovers, we are likely to see an increase in these and many other types of scams.
Top 3 cryptocurrency crime predictions in 2024
1. Cross-chain bridge hacking attacks
New Year’s Eve was not fun for the Orbit Bridge team – hackers attacked the cross-chain protocol. The intruders managed to withdraw more than $80 million worth of crypto assets. Ozys, the company behind the development of the protocol, suspects that a former employee facilitated the hack.
Cross-chain bridge hacks may become the dominant type of cryptocurrency crime in 2024. With the development of DeFi 2.0 and the increasing integration of various blockchains, cross-chain bridges are becoming a core element of crypto infrastructure, but often still have vulnerabilities. The funds backing the bridged asset on the receiving blockchain must be stored somewhere, and this storage often becomes a target for attacks. Enhanced security measures and rigorous code reviews are needed to address this issue.
2. False short-term investmentA classic method of large-scale fraud
As the cryptocurrency winter recovers, many projects have launched airdrop programs to benefit from increased market activity. Scammers also profit: they launch fake airdrop portals, impersonate legitimate projects or influencers, and offer users the opportunity to connect their wallets. Once the victim does this, their funds disappear.
With the Bitcoin halving coming soon, we may witness a rise in FOMO sentiment with people ready to invest their money without due diligence. This may lead to an increase in the number of fake airdrops.
3. Deepfake videos on YouTube and other social media
In the recovering market Another example of a scam is the recent Solana fraud. The platform’s TVL has nearly doubled since December 2023, accompanying a surge in the price of the SOL coin. A deepfake video from Solana co-founder Anatoly Yakovenko started appearing on YouTube, promising double the funds for everyone who scanned the QR code. Needless to say, the people who transferred the funds to the fraudsters never saw their coins again.
Similar deepfake videos on social media feature CZ, Elon Musk and other influential figures. As AI enables more realistic “art”, it may become one of the major scam types in a (hopefully) optimistic 2024.
Why we should be wary in 2024
Last year, due to cryptocurrency hackers and The amount of money stolen through fraud has dropped dramatically. Protocols become more secure, while complex market sentiments are not conducive to the success of scammers. However, as the industry rebounds and new technologies emerge, we may see an increase in cryptocurrency fraud in 2024 – and it looks like that’s already starting to happen. Take care and may your money stay safe as the bull market begins.
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Coindesk
Beincrypto
Bitcoinist
Cointelegraph