Crypto Losses Mount As Hacks And Rug Pulls Skyrocket In 2024, Report Finds

The ongoing bull run in the crypto market has brought soaring prices, fueled by regulatory breakthroughs and significant events like the Bitcoin (BTC) Halving and approval of crypto exchange-traded funds (ETFs) in the US and Hong Kong. However, alongside this positive momentum, the industry has also experienced increased losses due to hacks and rug pulls. 

May 2024 Sees 12% Decrease In Crypto Losses 

According to a recent report by security services platform Immunefi, in the first months of 2024, the crypto market witnessed a decrease in losses from hacks and rug pulls compared to the previous year. The total loss recorded in 2024 year-to-date is $473 million, a 20% decrease from $595 million during the same period in 2023. 

In May 2024 alone, losses amounted to $52M, a 12% decrease compared to May 2023’s $59M. Additionally, losses in May 2024 decreased by 28% compared to the previous month.

Among the specific incidents, two projects accounted for the majority of losses in May 2024. Gala Games, a crypto gaming project, suffered a loss of $21 million, while SonneFinance, a decentralized lending protocol, experienced a $20 million loss. 

The report highlights that decentralized finance (DeFi) projects were the primary target for exploits in May 2024, while centralized finance (CeFi) did not witness any major attacks during this period.

Ethereum And Binance Smart Chain Targeted

The security services platform also found that hacks remain the dominant cause of loss, accounting for $50 million in 14 specific incidents in May 2024. In contrast, fraud incidents accounted for $1.7 million, or just 3.3% of total losses over the same period. 

Ethereum (ETH) and the Binance Smart Chain (BNB) were the most targeted chains in May 2024, accounting for 62% of the total losses across targeted chains. 

Notably, Ethereum experienced nine incidents, representing 43% of the total losses, while BNB Chain witnessed four incidents, representing 19% of the total. 

Other chains such as Base, Arbitrum (ARB), Solana (SOL), The Open Network (TON), Blast (BLSTR), Fantom (FTM), Optimism (OP), and Polygon (MATIC) each suffered one incident, representing 4.8% respectively.

In sum, as the cryptocurrency market enjoys a fully formed bull run in 2024, the industry also faces the challenge of increased losses from hacks and rug pulls. While losses have decreased compared to the previous year, the total amount remains a significant concern. 

What is certain is that the dominance of hacks over fraud underscores the importance of strengthening security measures and addressing vulnerabilities to protect investor funds. As the market evolves, it will be critical to prioritize security to maintain investor confidence and support the continued growth of the crypto industry.

Featured image from Shutterstock, chart from TradingView.com