Crypto losses fall to $452 million, report says
Cryptocurrency losses due to hacks and fraud fell by $452 million in the first quarter of 2023, De.Fi, a company that provides antivirus and apps, has revealed.
In its latest report, titled ‘Report: $452m Lost in Crypto in Q1 2023. New Trends of Hacks and Scams’, the firm stated that this was a 65.23 percent decrease from the $1.3 billion recorded in the same period last year for .
The report stated that crypto losses increased to a nine-figure amount in March, for the second time in a row. It said $215 million was lost in March alone.
The firm noted: “Of the $452 million lost in Q1, a total of $215 million in losses occurred in the first 20 days of March alone, underscoring the rapid pace at which fraudsters have been working in recent weeks.
“While these losses are staggering, they also mark a decline compared to the same period in 2022, when $1.3 billion was lost.”
It explained that the biggest losses in Q1 were due to flash loans, which had increased in recent months, with over $200 million lost through the channel.
The firm, which claimed to maintain the largest database of hacks, scams and exploits in the cryptoverse, stated that the Ethereum chain was where the highest losses were recorded in the quarter.
As for recovery, “$130 million was recovered in the first quarter of this year, marking a recovery rate of 28.7 percent.”
In the corresponding period in 2022, 520 million dollars, 40 percent of the funds, were recovered. Fraudsters exploited new tokens to lure unsuspecting crypto investors in Q1.
The firm stated: “In terms of attack vectors, tokens have proven to be the most popular targets this year so far – this is not surprising given that tokens are easy to distribute, feeding on the fear of missing out on many new crypto investors.
“This is especially true with the market comeback of the last few days. However, in terms of amounts lost, lending and borrowing protocols took the prize, driven by a small number of high-profile events – Euler Finance and BonqDAO.”
Crypto platform investors who lost the most included Euler ($196 million), BonqDAO ($120 million), CoinDeal ($45 million), Monkey Drainer ($16.5 million) and Platypus Finance ($8.5 million).
De.Fi concluded by noting that the significant increase in financial losses in Q1 underscored the need for increased risk management and vigilance when investors invest in the decentralized financial sector.
“It is critical for investors to educate themselves about potential dangers and take appropriate measures to protect their investments,” it added.
Crypto scams have increased in recent times as the use of crypto continues to grow in many countries. Nigerians are one of the biggest users of crypto and are not isolated from these scams.
According to a report by Finder.com, 27 percent of Nigerian internet users own cryptocurrency assets.
A recent report by Chainalysis revealed that 24 percent of tokens created in 2022 were scams. Most of these scams were created on a pump-and-dump basis, adding that the creators would hype and promote these tokens (crypto-assets) to other investors, leading to a price increase as new investors buy.
This would allow creators to sell their overvalued shares at a profit, eventually leading to a price crash, leaving new investors stuck with low-value assets, the report said.
According to Chainalysis, investors spent $4.6 billion on this scam last year.
