Peckshield Report Reveals Decline in Crypto Losses Despite Persistent Threats in 2023

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Peckshield’s latest report reveals a mix of challenges and advancements in the crypto world. Despite a notable decrease in overall losses to hacks and scams, decentralized finance protocols remain heavily targeted, accounting for a significant portion of the cyber thefts.

Peckshield Report Unveils 27.78% Drop in 2023 Losses and Over $674 Million in Crypto Recovered

In an analysis of the 2023 cryptocurrency landscape, blockchain security firm Peckshield revealed a decrease in losses due to hacks and scams compared to the previous year, despite ongoing challenges in securing digital assets. The firm’s data, summarized in a report released on Jan. 29, sheds light on the evolving nature of threats in the crypto space and the strategies deployed to mitigate them.

#PeckShieldAlert 2023 saw 600+ major hacks in the crypto space, resulting in ~$2.61B in losses, with $674.9M recovered.
$1.51B lost to hacks (excluding #Multichain unauthorized withdrawals) & $1.1B to scams. This marks a 27.78% decrease from 2022. #DeFi protocols remained prime… pic.twitter.com/G7PIU3WyrX

— PeckShieldAlert (@PeckShieldAlert) January 29, 2024

Peckshield’s findings show a 27.78% decline in total losses from cyber thefts in 2023, amounting to approximately $2.61 billion, compared to around $3.6 billion in 2022. This decrease is noteworthy in the context of the expanding digital asset ecosystem.

The firm tracked over 600 major hacks throughout the year, with around $674.9 million successfully recovered. This figure represents a significant improvement over the $133 million recovered in 2022, attributed to more active negotiations with hackers and increased implementation of bug bounty programs.

Despite the overall decrease in losses, decentralized finance (defi) protocols continued to be the primary target, accounting for 67% of the total value stolen. This trend highlights the persistent vulnerabilities in the defi sector, which have been a focal point for cybercriminals.

Peckshield’s report also points out that flash loan attacks constituted 40% of the hacks in 2023, underlining the continuing threat in innovative yet potentially exploitable financial mechanisms in the crypto domain.

The recovery of stolen funds was aided by collaboration with centralized exchanges, Tether, and law enforcement agencies. These entities played a crucial role in freezing assets upon detection, thereby facilitating their recovery.

An intriguing aspect of the report is the shift in the nature of illicit crypto transactions. From 2018 to 2021, Bitcoin was the predominant currency in illegal transactions. However, in 2022 and 2023, there was a noticeable shift towards stablecoins, reflecting the changing landscape of cryptocurrency usage in unauthorized activities. This shift towards a preference for stablecoins is corroborated by the recent Chainalysis report that came to the same conclusion.

Do you expect the decline in crypto losses to continue into 2024? Share your thoughts and opinions about this subject in the comments section below.