Stolen crypto worth $674M successfully recovered in 2023

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Blockchain security firm PeckShield has published data summarizing the losses to hacks and scams in 2023. According to the company, $2.61 billion was lost in the year, excluding multichain losses.

PeckShield noted in its report on Jan. 29 that the amount shows a 27.78% decrease compared with 2022 when total global cyber thefts totaled around $3.6 billion.

The security firm also highlighted that over $674 million was recovered from the more than 600 large-scale hacks they tracked, equating to 25% of the crypto stolen.

In a statement to Cointelegraph, the PeckShield team said that the amount recovered was up significantly on 2022 when it estimated that only about $133 million was recovered from hacks. According to the security team, the recovery of funds resulted from more active negotiations with hackers and the rise of bug bounty programs:

“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.”

PeckShield also said that collaborating with centralized exchanges, Tether and law enforcement to freeze the funds whenever they detect them can also lead to fund recovery.

Apart from the amount recovered from hacks, PeckShield highlighted various data points, including flash loans, decentralized finance (DeFi) and the volume difference between hacks and scams. The data shows that among the hacks that happened in 2023, 40% involved flash loan attacks.

In addition, while some argue that improvements in DeFi security led to a reduction in the amount of crypto stolen in 2023, PeckShield highlighted that DeFi remained a prime target for hacks and scams. On Jan. 4, CertiK co-founder Ronghui Gu told Cointelegraph that 2023 was a “positive development” in blockchain security. The executive highlighted the growth of bounty platforms and proactive security measures as a good sign for the year.

Related: North Korean hackers stole less in 2023 despite more breaches — Chainalysis

Despite this, PeckShield highlighted that 67% of the losses in 2023 happened in DeFi, while 33% were in centralized finance. It also underscored that 58% of the losses were due to hacks, and 42% were because of scams.

Malicious actors have also been diversifying the crypto they are targeting for their activities. From 2018 to 2021, Bitcoin (BTC) dominated the trading volume for illicit transactions. However, in 2022 and 2023, things shifted as stablecoins began to take a larger chunk of the illicit transaction volume.

Magazine: DeFi’s billion-dollar secret: The insiders responsible for hacks