In the latest report from TRM Labs, we learn that the amounts stolen in hacks within the cryptocurrency ecosystem fell by 70% in the first quarter. We take a look at these figures.
Cryptocurrency ecosystem sees 70% drop in hacks
Regularly, cryptocurrencies and more specifically the decentralised finance sector (DeFi) are victims of hacks on the various protocols that make them up. The modus operandi is varied and so is the size of the haul. Despite this, the latest report from blockchain analysis firm TRM Labs shows a 70% drop in the first quarter of this year.
More precisely, the amounts stolen were in fact around $400 million. The number of attacks, meanwhile, remains similar in comparison with the first quarter of 2022, i.e. fewer than forty this year compared with more than forty last year, as shown in the graph below:
Amounts stolen in crypto ecosystem hacks by quarter
TMR Labs also points out that the drop in amounts stolen has been greater than the drop in cryptocurrency prices. In the case of ETH, it was approximately 45%.
In addition, the average loot was $10.5 million in the last quarter compared with $30 million in the first quarter of 2022.
The report also highlights a tendency for hackers to return stolen funds. We will recall the Euler Finance soap opera: after nearly $197 million was stolen on 13 March, the assets were finally returned in dribs and drabs until 4 April.
Figures to be qualified
While we have every right to be pleased about a reduction in the number of cryptocurrencies stolen in hacks, it is important to qualify all of this. Indeed, given the youth of our ecosystem, it may only take one attack to disrupt all of this data.
To be relevant, trends should not be established over a few isolated quarters, but over several years, in order to put the value of the amounts stolen and the frequency of attacks into perspective with market movements.
For its part, the blockchain analysis company indicates that in 2022, 75% of the funds stolen will be concentrated in just 10 hacks. Furthermore, the first quarter shows similar characteristics to last year’s third quarter, when the year ended catastrophically, making 2022 the worst year for hacks.
Among the reasons that could deter malicious actors from operating, TRM Labs cites the example of Avraham Eisenberg, the manipulator of the Mango Market protocol who was arrested in December.
However, while it is true that the growing interest of law enforcement agencies around the world in this type of mischief may dissuade isolated actors from taking action, it could be less effective for ‘professional’ groups like Lazarus. So the best way to reduce the number of hacks in the industry in the long term will be to make them less profitable, in particular by continuing to place more and more importance on the security of DeFi applications.
