Reports reveal that the crypto industry lost a whopping $42.6 million to hackers in May 2024.
According to Certik report, a security-focused ranking platform that analyzes and monitors blockchain protocols and DeFi projects, it disclosed that flash loan attacks accounted for majority of these losses, with around $20.7 million stolen from the blockchain system.
Other scams included exit scams which accounted for $1.8m loss and Exploits accounting for $19.7m in loss. Decentralized finance (Defi) remains the primary target for hackers in the crypto space with over $2 billion lost to hacks and exploits last year.
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Ethereum and BNB were the most targeted blockchains in May 2024, with the duo representing over 62% of total losses across all blockchains targeted.
One of the most notable incidents was the attack on Gala Games, which resulted in a loss of $21.6 million, closely followed by Sonne Finance, which suffered a loss of $20 million due to a flash loan attack.
These events underscore the vulnerability of even the most established platforms within the crypto ecosystem and the urgent need for stronger security measures. However, it is worth noting that despite the losses, around $96.2 million was recovered, which helped mitigate the economic impact to some extent.
Notably, amid growing concerns of scams in the crypto space, crypto exchange Coinbase has warned about the prevalence of deepfake scams in the industry.
Coinbase Chief Information Security Officer, Jeff Lunglhofer, expressed concerns that the advancement of AI technology, deepfake, is certain to harm the crypto industry. This has been underscored by videos mimicking the real life images of crypto CEOs such as Coinbase Brian Armstrong, that have been used in advertising fake token giveaways.
Also, the United States Securities and Exchange Commission (SEC) released an update to alert the public of the prevailing menace of fraudsters who use cryptocurrencies securities for purposes of defrauding investors. Due to the growing popularity of digital currencies, such scams have evolved into more elaborate forms using several deceptive strategies to defraud people.
The latest advisory by the SEC notes that investors should be especially wary since fraudsters are using the promise of cryptocurrencies to perpetrate their schemes. These frauds typically involve the use of sophisticated technologies and social manipulation to give an impression of genuine investment products.
Furthermore, the SEC has noted that pump and dump fraud is on the rise, especially in the context of low-quality or speculative coins such as memecoins, through which investors can lose a lot of money.
According to the SEC, another thing that investors need to be careful about are demands for extra payments for the unlocking or recovery of their investment accounts. These requests are usually accompanied by the promises that the person has to pay taxes and fees or to get through some regulation issues, which are actually just an attempt of the scammers to get more money from the victims.
The SEC further encouraged anyone interested in investing to undertake their research and consult accurate information, especially when investing in crypto assets. Some of the checks that should be conducted to ensure that any investment opportunity is legitimate include checking the identity of the people or companies offering the investment opportunity and the accuracy of their claims on the returns that one is likely to get from the investment.
The current surge in crypto fraud highlights the importance of security in the blockchain space. As the crypto market continues to expand and evolve, so do the techniques and strategies employed by attackers continue to upgrade.
There are calls for stakeholders within the industry which includes investors, developers, regulatory bodies, to work together to identify potential vulnerabilities and address them promptly.
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