2023 Witnessed Decline in Crypto Scams & Soaring Recovery Rates

The damages resulting from crypto scams and theft in 2023 have been revealed by well-known blockchain security startup PeckShield in a recent report. Apart from multichain losses, the analysis shows that the cryptocurrency market lost $2.61 billion in total this year. In comparison to the prior year, when worldwide cyber thefts totaled almost $3.6 billion, this indicates a noteworthy 27.78% decrease.

Decreasing Losses and Enhanced Recovery Efforts

In addition to highlighting the decline in losses, PeckShield’s report from January 29th underscores a notable increase in fund recovery. Approximately $674 million, or 25% of the monies that were pilfered, were successfully recovered from over 600 large-scale breaches. Compared to 2022, when just $133 million was predicted to be recovered, this is a substantial increase. The heightened recovery operations are ascribed to the more focused execution of bug bounty schemes and the heightened discussions with hackers.

According to PeckShield, “Engaging in active negotiations with hackers can lead to the return of stolen funds. Implementing bug bounty programs or on-chain sleuthing to identify hackers and vulnerabilities in the system can enhance security.”

The report also underscores the importance of collaboration with centralized exchanges, Tether, and law enforcement to freeze identified funds, ultimately increasing the odds of recovery. It delves into various topics, including decentralized finance (DeFi), flash loans, and the volume disparity between hacks and scams. Notably, 40% of hacks in 2023 involved flash loans.

According to the statistics, 33% of losses in centralized finance and 67% of losses in the DeFi sector happened in 2023. Moreover, 42% of the results were the consequence of frauds, and 58% were related to hacking.

There has been a change in the nature of cybercrime in the cryptocurrency industry. Stablecoins gained a greater part of illicit transactions in 2022 and 2023, after Bitcoin had previously controlled this market from 2018 to 2021. This progression is indicative of the flexibility and variety with which fraudsters choose their cryptocurrency victims.

PeckShield’s observations offer helpful advice on resolving issues and bolstering the protection of digital assets as the crypto market changes. Remain vigilant and aware.