Less crypto is being stolen this year, thanks to industrywide implementation of anti-money-laundering standards, and increased efforts by law enforcement and regulators to go after bad actors, according to new research by TRM Labs, a blockchain intelligence company, published Tuesday.
Around $400 million in cryptocurrencies was stolen across nearly 40 attacks in the first three months of 2023, which was down 70% from the same time frame in 2022, according to the analysis. The average size of a crypto hack also fell in the first quarter, to $10.5 million from nearly $30 million in the opening quarter of 2022.
Victims who have been hacked have been able to recover over half of all stolen funds in the first quarter, though it’s uncertain whether this hack respite will last. “Individual quarters [of a given year] offer poor predictions of how much money will be lost to hacks during the whole year,” the report states. “The amount stolen and number of incidents in the first quarter of 2023 mirrors that of the third quarter of 2022. That was followed by a record-setting number of hacks that turned 2022 into a record year.”
Last year, one report showed that hacks and scams took an estimated $3 billion from victims. Major hacks included that of Axie Infinity in March 2022, where hackers stole $625 million in crypto assets from gaming-focused Ronin Network, which hosted the Axie Infinity game. In September, crypto market maker Wintermute was hacked for $160 million in its DeFi operations.
After the collapse of crypto exchange FTX in November 2022, on-chain data showed that the exchange’s wallets were losing funds that ranged anywhere from $270 million to $400 million. Sam Bankman-Fried, former chief executive of FTX, had said in an interview that a former employee or bad actor likely stole private keys to FTX’s crypto wallets, and drained the funds. It was later revealed by new FTX chief executive John J. Ray III that FTX had stored private keys that weren’t encrypted, and overall lacked security.
The 10 largest hacks of 2022 accounted for approximately 75% of the total amount stolen over the course of that year, according to TRM Labs.
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