Crypto News
| Published On May 23, 2023 7:51 am CEST | By Ricky Grant

Crypto Hacks Decline, with Hackers Increasingly Returning Stolen Funds: TRM Labs Report

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Hackers stole almost $400 million from crypto projects in 40 attacks during the first quarter of 2023, according to a research from blockchain intelligence firm TRM Labs. However, this is a 70% decrease from the first quarter of 2022. TRM reports that the average hack size has also fallen, from $30 million in 2022 to $10.5 million in 2023.

Surprisingly, hackers are increasingly returning stolen funds, preferring a “white hat” compensation from the compromised projects. According to TRM Labs, hack victims will recover roughly half of the stolen assets by 2023. Notably, in one case, an attacker compromised the TenderFi protocol but returned half of the $1.6 million he gained in exchange for a $850,000 payout. Similarly, the hacker behind the Euler loan protocol exploit promised to repay the whole $200 million in cryptocurrency he stole. Both occurrences took place in March. In another instance, the hacker who emptied the Safemoon protocol refunded $7.1 million of the stolen cryptocurrency while keeping the remaining $9 million.

According to TRM Labs, this tendency may be explained by increased regulatory attention on crypto attacks and prominent enforcement cases. Crypto exchanges are tightening their KYC/AML standards, making it more difficult to cash out stolen coins. Furthermore, from August 2022, the popular Ethereum mixing protocol Tornado Cash has been sanctioned by the United States, resulting in the blacklisting of all Tornado-related money by authorised exchanges.

The arrest of Avraham Eisenberg, the first person known to have been arrested for a DeFi exploit, may likewise act as a deterrence. Eisenberg officially acknowledged hacking the Mango Markets protocol, exposing its flaw. In December, he was captured in Puerto Rico.

Ari Redbord, TRM Labs’ head of legal and government affairs, emphasises the improved capabilities of investigators employing blockchain intelligence as well as independent researchers using open-source tools to trace and monitor stolen cash. This has resulted in a situation in which compromised money are publicly tracked in real time. According to Redbord, hostile hackers are having difficulty off-loading funds and are increasingly settling for bug bounties. Furthermore, “white hat” hackers are getting increasingly involved in the ecosystem, which may aid in strengthening cybersecurity safeguards for DeFi services.

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DeFi hackers have already returned stolen assets, including examples involving Defrost Finance and Nomad Bridge in 2022, Poly Network in 2021, and dForce in 2020.

Crystal Blockchain estimated the entire cost of breaches and scams at $119 million in March. DeFi protocols continue to be a popular target for attackers because complicated smart contracts can be manipulated. DeFi exploits accounted for 82% of all crypto stolen in 2022, according to Chainalysis.

Ricky Grant

Ricky is a bitcoin enthusiast and understands the significance of cryptocurrencies not just in the iGaming industry but in society. Ricky has a particular interest in the US Casino landscape, and anything related to this. His favorite casino table games are blackjack and baccarat.

Tags: Crypto