The crypto sector has encountered unprecedented financial losses in 2024, with figures surpassing $2.11 billion in the first three quarters. This staggering amount already eclipses the total annual losses of $1.69 billion recorded in 2023, as detailed in a recent report by Cyvers.
The current losses of $2.114 billion signify a shocking 72% increase compared to the same period in 2023, which saw losses of $1.23 billion. This dramatic rise highlights the ongoing volatility and security challenges within the crypto market.
Centralised Finance (CeFi) Incidents on the Rise
Centralised exchanges (CeFi) have borne the brunt of this year’s losses, with hacking incidents skyrocketing by nearly 1,000% year-on-year. Notable breaches include the DMM Bitcoin exchange, which suffered a staggering $305 million loss, and Turkey’s BtcTurk, which reported losses of $55 million. In total, centralized exchanges accounted for around $401 million in losses across five significant incidents in the second quarter alone.
Decentralised Finance (DeFi) Shows Some Resilience
While overall crypto losses have surged, Decentralised Finance (DeFi) platforms displayed a degree of resilience, with losses decreasing by 25% year-on-year in Q2 2024. However, DeFi still faced significant challenges, with a total of $171.3 million lost across 62 incidents, primarily targeting Ethereum and BNB Chain.
Growing Incidents and Vulnerabilities
From January to September 2024, the cryptocurrency sector reported 131 incidents, representing a staggering 197% increase from the 44 incidents reported during the same timeframe in 2023. The breakdown includes 79 smart contract exploits and 51 access control violations. Access control vulnerabilities alone surged to $1.62 billion, a 99% increase from $742.6 million in the same period last year, while losses from smart contract vulnerabilities decreased by 19%.
This alarming trend underscores the critical need for the cryptocurrency industry to bolster its security protocols. Cyvers emphasises the importance of adopting real-time threat detection technologies and evolving regulatory frameworks to safeguard the sector against future threats.
