The Devastating Month of Crypto Crime
In a shocking revelation, it has been identified that November was the most destructive month in the year for crypto criminality, leaving several investors at a loss of approximately $363 million. In specific terms, approximately $316.4 million was lost due to exploits while flash loans caused damages amounting to $45.5 million. Additionally, about $1.1 million was lost to various cunning exit scams. This disheartening news was announced by renowned blockchain security firm, CertiK.
Key Cryptocurrency Exploits in November
The most substantial exploits in the month took place on Poloniex and HTX/ Heco Bridge, yielding losses of $131.4 million and $113.3 million respectively. In a regrettable incident, an individual fell victim to a phishing attack and incurred a loss of $27 million. Another noteworthy event was the KyberSwap attack which led to damages worth $45 million, making it pretty much the sole contributor to flash loan attacks for the month.
Comparative Analysis of Crypto Crimes
The current monthly record for criminal activities has now surpassed the previous high of $329 million, that was set back in September. The previous high resulted mainly from the $200 million Mixin Network attack. Considering the cumulative losses through the year, a total of about $1.7 billion has been lost to an array of exploits, exit scams, and flash loan attacks in 2023. Alarmingly, when compared to the entire previous year, by November already 54% of the total crypto drained in 2022 has been lost, when the loss stood at a staggering figure of $3.7 billion.
Auditing Isn’t Enough
Ronghui Gu, co-founder of CertiK, emphasizes that merely opting for a standard smart contract audit isn’t adequate in today’s vulnerable market. He points out that malefactors of crypto crime are persistently finding innovative and effective ways to exploit protocols and victims. SIM-swapping and multisignature susceptibilities are among the most recent security loopholes that criminals capitalized on.
Setbacks to Crypto Adoption
Such unfortunate events raise doubt in the safety of cryptocurrency, preventing potential users from participating. Christian Seifert, a researcher at a security firm quotes, “Imagine you losing all your savings because the branch of your bank got broken into overnight. You wouldn’t bank there.” He further adds that these incidents “scare away” people who were previously open to exploring the crypto space. Additionally, Jerry Peng, a research analyst also points out that these incidents deter interested users from venturing into the world of Web3.