Cryptocurrency market lost US$3.9b in 2022 — report

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KUALA LUMPUR (Jan 9): The crypto industry lost a total of US$3.9 billion (RM17.07 billion) in 2022, according to bug bounty and security services platform Immunefi.

In a report titled “Crypto Losses in 2022” last Friday (Jan 6), the firm said 2022 saw US$3.7 billion lost through hacks alone, a 58% increase compared to 2021.

It said in 2022, hacks continued to be the predominant cause of losses at 95.6%, in comparison to frauds, scams, and rug pulls, which comprised only 4.4% of total losses.

In total, the industry saw a loss of US$3.77 billion to hacks in 2022, in 134 specific incidents.

Immunefi said this number represents a 58.3% increase compared to 2021, when losses caused by hacks totalled US$2.38 billion in 102 incidents.    

It said that in 2022, DeFi (decentralised finance) continued to be the main target of successful exploits at 80.5% as compared to CeFi (centralised finance) at 19.5% of total losses.

DeFi suffered US$$3.18 billion in total losses in 2022, across 155 incidents.

This number represents a 56.2% increase compared to 2021, when DeFi lost US$2.04 billion in 107 incidents.                        

Immunefi said the two most targeted chains in 2022 were BNB Chain and Ethereum, representing more than half of the chain attacks in 2022 at 63.3%. BNB Chain surpassed Ethereum, and became the most targeted chain in 2022, with 65 incidents, representing 36.1%, while Ethereum witnessed 49 incidents, representing 27.2%.

The firm said that in the fourth quarter of 2022 (4Q2022) alone, the industry lost US$1.62 billion, adding that these numbers showed an increase compared to 4Q2021, when hackers and fraudsters stole US$739.24 million.

It said most of last quarter’s amount was lost by two specific projects: FTX and BNB Chain, totalling US$1,220,000,000. Together, they represent 75.3% of 4Q2022 losses alone.       

In the same quarter, hacks continued to be the predominant cause of losses as compared to fraud, scams, and rug pulls. Fraud accounted for only 7.4% of total losses in the quarter, while hacks accounted for 92.6%.

Immunefi chief executive officer Mitchell Amador said looking at the losses suffered by the community in 2022 is a reminder of the importance of prioritising security, and implementing robust and consistent measures moving into 2023.

“By proactively identifying and addressing vulnerabilities, we can protect the community from harm, and build trust in the field. As we make the industry safer, everything else can flourish.”