The cryptocurrency industry saw a sharp drop in the amount of money lost to hackers in 2023, as it ramped up its security measures and worked more closely with law enforcement, a report by TRM Labs and other blockchain security firms showed.
Cybercriminals managed to steal only about $1.85 billion from digital wallets and platforms in 2023, compared with nearly $4 billion in 2022, the report said. The number of hacking incidents stayed around 160, but the average value of each theft fell significantly, suggesting a major improvement in the industry’s protection.
Infrastructure Attacks Still Lead Threats
The Biggest Threats in 2023 The report identified infrastructure attacks, where hackers breach a system’s core infrastructure, as the most costly type of hack in 2023. These attacks made up almost 60% of the total amount stolen, with an average value of almost $30 million per incident.
Some of the worst infrastructure attacks of 2023 were the hacks against Euler Finance in March, Multichain in July, Mixin Network in September, and Poloniex in November. Each of these attacks resulted in more than $100 million in stolen funds.
The Three Pillars of Security
The report credited the decline in hack volumes to three main factors:
Enhanced industry security measures: Cryptocurrency exchanges and wallet providers have boosted their investment in real-time transaction monitoring and anomaly detection systems, making it harder for hackers to get away with their crimes.
More law enforcement action: Law enforcement agencies around the world have increased their attention on cybercrime involving digital currencies. This has led to faster reactions to hacking incidents and the recovery of stolen assets.
Better industry coordination: Cryptocurrency exchanges, wallet providers, and blockchain networks are exchanging information about vulnerabilities and threats more frequently. This cooperation has made it more difficult for hackers to take advantage of systemic weaknesses.
Security Remains a Priority
While the decrease in hack volumes is a positive sign, the cryptocurrency security landscape is still volatile and uncertain. The appearance of a new sophisticated threat could quickly change the positive trend.
“The industry and law enforcement agencies have to stay alert and flexible,” the report said. “They have to constantly monitor new threats and be ready to modify their security measures accordingly.”
The success of the cryptocurrency industry in fighting cybercrime will depend on its ability to sustain this three-pronged approach to security. By constantly enhancing their defenses, collaborating with law enforcement, and sharing information, the industry can create a more secure user environment and build more trust in digital assets.