Losses from crypto hacks and scams declined by 40% year-over-year in the third quarter of 2024, falling to just $413 million, according to a Sept. 26 report from blockchain security platform Immunefi.
In the previous year, third-quarter losses were $685 million. Quarterly losses also declined by approximately 28% when compared to the second quarter of the current year.
Despite the good news, Q3 did witness some spectacular crypto hacks and exploits. According to the report, the largest hack of the quarter was against the WazirX crypto exchange, which resulted in a loss of $235 million, while the second largest was the $52 million BingX hack. Together, these hacks accounted for more than 69% of the total losses for the quarter.
Top crypto losses Q4 2024. Source: Immunefi.
Losses from rug pulls and other types of fraud represented a very small portion of the quarterly total. Only $3 million was lost across three incidents, amounting to 0.8%. Overall, losses from scams were down 86.4% compared to the same quarter in the previous year.
Hacks vs. fraud analysis Q3 2024. Source: Immunefi.
Exploits in decentralized finance (DeFi) were also down significantly. $103 million was lost in DeFi across 31 incidents, a 79.2% decrease from the $500 million of losses suffered in Q3 2023.
Despite the decline in losses for most sectors, the potential for massive losses at centralized exchanges continues to plague the crypto space.
Immunefi founder Mitchell Amadour claimed that key management continues to be the biggest “infrastructural issue” that needs to be solved in order to reduce these losses He stated:
We're seeing a higher number of incidents targeting DeFi, while CeFi [centralized finance] experiences fewer incidents but often with more severe consequences, with hundreds of millions in stolen funds in a single exploit. In CeFi, the biggest infrastructural issue is private key management, which is essential to maintaining the self-custody of crypto assets but is not typically subject to security audits. It requires rigorous key management policies, practices, and emergency plans.
Related: 7 ways to safely store your private keys
Crypto losses had been on a downtrend prior to Q2 2024, when wallet software became better at identifying scam addresses and warning users against interacting with them.
In Q1, losses declined by 23%. But they rebounded in Q2, as private key hacks at centralized exchanges led to a 115% increase in losses.
Magazine: Bankroll Network DeFi hacked, $50M phisher moves crypto on CoW: Crypto-Sec