Over $2 Billion Stolen From Web3 in 2024: Ethereum Takes the Biggest Hit

by

Approximately $2.3 billion was fraudulently taken from various web3 initiatives, with Ethereum-related schemes making up over half of the overall thefts.

Based on a 2024 report by Cyvers titled “State of Web3 Security in 2024”, it was found that approximately half of all stolen funds originated from Ethereum-related projects. This is primarily due to Ethereum’s position as the dominant blockchain in the Decentralized Finance (DeFi) sector and its significant liquidity pools.

On the list of blockchains that experienced hacking attempts, BNB Chain ranked second, with approximately a quarter of all losses. Meanwhile, Bitcoin, XRP, and Arbitrum accounted for 5%, 4%, and 3% of losses, respectively.

In 2024, about 81% of the total funds that were lost were due to access control failures, which were often connected to poor authentication and authorization protocols. On the other hand, smart contract vulnerabilities caused approximately 19% of the losses by identifying and leveraging flaws in the code to drain funds.

As a crypto investor looking back on 2024, three significant cybersecurity incidents that stood out were the DMM Bitcoin exploit, the PlayDapp breach, and the WazirX attack. These events resulted in losses of $305 million, $290 million, and $235 million respectively. Upon closer examination, it was clear that each incident was rooted in weaknesses within the access control mechanisms.

Additionally, significant multi-million dollar occurrences involve instances like the manipulation of the Ethereum platform’s Mucha tokens, resulting in a loss of $97 million due to a malicious developer taking advantage of smart contract weaknesses. Furthermore, incidents related to address poisoning led to approximately $68 million in losses.

Numerous Web3 projects are neglecting to put adequate security measures in place for safeguarding user resources. A single error in a smart contract can have disastrous consequences, and the events of 2024 demonstrated this fact.

2024 witnessed a progressive increase in cryptocurrency losses on a quarterly basis, with the third quarter suffering the heaviest blow, totaling approximately $669 million in losses. The fourth quarter, conversely, experienced the fewest incidents and recorded losses of about $130 million.

The initial stages of recovery saw a promising start, bringing in approximately $620 million in the first quarter and around $562 million in the second. Unfortunately, the pace of recovery significantly slowed down towards the end of the year. Only $93 million was recovered in the third quarter, followed by a meager $25 million in the fourth.

Swift action in retrieving misappropriated funds is more effective, but time lapses frequently lead to assets vanishing before law enforcement and protective services have a chance to intervene,” the report stated as an alternative phrasing.

As a researcher focused on cybersecurity, I firmly advocate for the standardization of ongoing monitoring and real-time vulnerability testing to counteract escalating threats. Furthermore, I strongly endorse the adoption of AI-driven detection systems to enhance our defense capabilities.

A previous analysis by cybersecurity company PeckShield revealed a significant increase of more than 15% in crypto-related hacks and frauds during the year 2024, with decentralized finance systems being the most frequently targeted.

Or:

A study conducted by Web3 security firm PeckShield showed that there was a rise of over 15% in incidents of cryptocurrency thefts and swindles in the year 2024, with decentralized financial protocols being the primary focus.

Read More

2025-01-17 13:37