Blockchain intelligence firm TRM Labs says losses from cryptocurrency hacking in 2023 are down more than 50% compared with 2022, and credits the decline to improvements in industry security.
TRM Labs’ report published on Dec. 13 cites its research into the key factors behind the significant drop in cyber theft. It reveals that losses from 160 hacks to crypto projects fell to about $1.7 billion in 2023, less than half the $4 billion stolen from internet protocols in 2022.
TRM Labs said the decline is due to enhanced security measures, which have seen the cryptocurrency industry incorporate real-time transaction monitoring and anomaly detection systems, strengthening digital wallets and exchange platforms.
— TRM Labs (@trmlabs) December 12, 2023
In 2022, the crypto industry was in a downturn and suffered substantial thefts from crypto exploits and hacks. By mid-October, Chainalysis had already labeled 2022 as the “largest year ever for hacking activity.”
TRM Labs’ research report notes that law enforcement agencies worldwide have bolstered their efforts against cybercrimes in the digital currency sphere. Collaborative actions, quick responses, and better asset recovery tactics have heightened the chances of detection and prosecution, discouraging potential hackers.
In 2023, the industry, comprised of cryptocurrency exchanges, blockchain networks, and wallet providers, adopted a collaborative approach by sharing information about vulnerabilities, threats, and breach incidents, creating a solid defense against cybercriminals.
TRM Labs said more than 60% of the total losses in 2023 resulted from infrastructure attacks, particularly involving private key theft or compromises in seed phrases. A considerable portion of the losses came from large-scale attacks on specific targets, with the top ten hacks responsible for around 70% of the total funds stolen.
Although the report records a decrease in hacking incidents, it also highlights the changing nature of cyber threats. It stresses that the cryptocurrency industry and law enforcement must stay vigilant and adaptable to maintain this positive trend in a swiftly changing landscape.
In the first eight months of the year, the crypto industry experienced nearly $1 billion in losses due to hacks, exploits, and scams. These hacks included over $100 million in digital asset losses, and the HECO Chain bridge hack alone was responsible for the theft of more than $80 million.