Crypto-industry losses from hacks reach $1.22 billion so far this year

For the first quarter of 2022, crypto projects lost more than $1.22 billion due to hackers and scammers. This is 695% higher than in the same period a year earlier, according to Yahoo Finance, citing Immunefi.

The DeFi ecosystem was the focus of attacker activity.

Up to 99% of losses are linked to software exploits, including the year’s largest hacks so far, Wormhole and Ronin — at $319 million and $625 million respectively.

Experts say this is not an anomaly. Such attacks are likely to spread further, while cases of investor fraud will decline.

“We should expect that such incidents will occur more often, as more criminal groups acquire their own DeFi hacking skills. In addition, as the sector grows, these hacks are becoming increasingly profitable,” said Immunefi founder and CEO Mitchell Amador.

According to Amador, after the market peak in November 2021, the number of newcomers entering it fell. This overall reduced investors’ susceptibility to fraud thanks to experience.

The founder of RugDocsIO under the alias Rug Doctor also noted that a rise in DeFi platforms played a significant role in increasing the number of costly thefts.

Projects are increasingly moving beyond Ethereum due to high fees and are choosing layer-1 networks such as Solana, Avalanche, Polygon, Algorand, Polkadot or Cardano. However, the number of auditors and security specialists is not keeping pace with innovations, Rug Doctor stressed.

“Many protocols do not invest enough in security. We see more talented programmers coming to DeFi, including attackers. The sector must incentivise capable developers and devote more to security than before. We need grants, educational programmes and industry standards,” the expert says.

Back in 2021, earned a record $14 billion, according to Chainalysis.