Massive Losses in July
The cryptocurrency sector faced significant losses in July 2024 as hackers stole approximately $266 million through 16 separate breaches. Among the most notable incidents was the July 18 attack on Indian crypto exchange WazirX, which accounted for over $230 million, or 86.4%, of the month’s total losses. Some independent investigations have attributed the WazirX hack to North Korean cybercriminals.
Details of the WazirX Hack
According to blockchain security firm PeckShield, the stolen WazirX funds, amounting to 61,154 Ether, remain under the hackers’ control as of August 1. Other significant victims of July’s crypto hacks included algorithmic protocol Compound Finance, which lost $24 million, bridging protocol Li.Fi ($10 million), decentralized AI protocol Bittensor, and liquidity provider Rho Markets, each losing $8 million.
Use of Tornado Cash
In many instances, the stolen funds were moved to the cryptocurrency mixer Tornado Cash, a technique used by hackers to obscure the origin of the funds and evade detection. In contrast to July, June saw a lower loss of $176 million spread across approximately 20 incidents, highlighting a sharp increase in the value of stolen assets in just one month.
Terra Blockchain Incident
A notable incident at the end of July involved the Terra blockchain, which temporarily halted operations at block height 11430400 following a hack that resulted in the theft of $6 million. The attacker exploited a known vulnerability to steal 60 million ASTRO tokens, 500,000 USD, 3.5 million USD Coin, and 2.7 Bitcoin. Terra developers quickly responded with an emergency chain upgrade, resuming block production on the same day.
Rising Targets and Vulnerabilities
Deddy Lavid, co-founder and CEO of Web3 security firm Cyvers, noted that centralized finance (CeFi) entities have become the primary targets for cryptocurrency hackers in 2024. He also highlighted the rising number of attacks against smart contract-based projects, emphasizing that today’s biggest security vulnerabilities stem from both coding issues and personal negligence.
Record Recovery Rate in Q2
While hacks and scams continue to plague the crypto market, the industry has shown great resilience, achieving a record recovery rate of 77% for stolen funds in the second quarter of 2024. In Q2 2024, $347.4 million of the stolen crypto funds were successfully recovered or frozen out of the total $512.9 million lost, according to Hacken’s Web3 Security Report Q2 2024. “For the second consecutive quarter, the silver lining amid the alarming rate of theft in crypto is the amount of funds recovered,” the report wrote.
Crypto Scams on X
It is worth noting that cryptocurrency scams have thrived on X, with analysts attributing a significant portion of all crypto scams to scammers on the platform. Scam Sniffer, a web3 anti-scam company present on X, conducted an analysis revealing that nearly $50 million is lost each month due to account impersonation on X.com.
