In 2023, the cryptocurrency landscape witnessed a surge in cyberattacks, resulting in the theft of approximately $2 billion, according to De.FI, a Web3 security firm renowned for its Rekt leaderboard.
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The firm’s report, according to TechCrunch, highlights the alarming frequency and scale of crypto hacks, ranging from the record-breaking $600 million Ronin network breach in 2022 to the recent $200 million hack against Mixin Network.
De.Fi’s analysis underscores the persistent vulnerabilities within the decentralized finance (DeFi) ecosystem. Despite advancements made to address these issues, 2023 served as a stark reminder of the ongoing challenges, even amidst subdued interest in the space during the bear market’s first half.
TRM Labs, a blockchain intelligence company, estimated the total crypto stolen by hackers in 2023 at approximately $1.7 billion as of mid-December. Among the year’s worst crypto thefts were incidents like the nearly $200 million hack on Euler Finance and major breaches against Multichain ($126 million), BonqDAO ($120 million), Poloniex ($114 million), and Atomic Wallet ($100 million), among numerous others.
The industry’s vulnerability to cybercrime echoes the alarming trend seen in 2022 when blockchain monitoring firm Chainalysis reported a record-setting $3.8 billion stolen by cybercriminals. North Korean government hackers, identified as the Lazarus Group, were responsible for $1.7 billion of that theft, contributing to funding the regime’s sanctioned nuclear weapons program.
Reflecting on the significant economic impact, Chainalysis emphasized that cryptocurrency hacking constituted a substantial portion of the nation’s economy, and this trend persisted with hackers pilfering $3.3 billion in 2021.
A Surge Coming in Self-Custodial Platforms
As the crypto industry reflects on these challenges, Blockster anticipates a key trend in 2024: a surge in self-custodial accounts on platforms. The concept of self-custody, where individuals securely manage their cryptocurrencies without relying on third-party services, is emerging as a fundamental approach to prevent funds from being stolen on centralized exchanges.
“Investors can reduce the risk of third-party interference and unauthorized access, creating their own security processes and using cold storage solutions for increased security.”
MetaMask
Meanwhile, Jack Dorsey’s Block launched the Bitkey wallet, emphasizing self-custody, and Uphold introduced Vault, contributing to the industry trend. This shift aligns with Bitcoin’s core decentralized philosophy, eliminating reliance on third parties.
Anibal Garrido, General Director at BTC Techno, highlighted self-custody as a practical necessity, ensuring digital asset protection. “It is simply a necessity that guarantees and protects your digital assets from those who only want to benefit themselves instead of you,” said Garrido.
These developments signal a broader industry trend toward prioritizing user-controlled security measures, reducing reliance on vulnerable centralized platforms.
