Rising Concern: Crypto Hacks and Frauds Threaten DeFi Protocols
Summary:
Cryptocurrency hacks and exploits in August resulted in a total loss of $15.8 million, primarily targeting decentralized finance (DeFi) protocols. Notable incidents include the Exactly Protocol hack and the alleged exit scam by Magnate Finance. So far this year, users have lost $1.25 billion to crypto hacks and fraud. The article also touches on the topic of banning ransomware payments.
Hacks and exploits in the month of August resulted in the loss of $15.8 million in cryptocurrencies, according to a report by blockchain security firm Immunfi. The total amount lost to hacks and fraud in August was $23.4 million, which is a significant decrease from the $320.5 million lost in July. Notably, all of these incidents targeted decentralized finance (DeFi) protocols, with no impact on centralized finance entities. Among the 21 security incidents reported, five occurred on the Ethereum blockchain and four took place on BNB Chain. Immediately after its launch on August 9, Coinbase's layer-2 solution, Base, experienced four security exploits. One of the major losses was the Exactly Protocol hack on August 18, where a total of 4,323.6 ETH (equivalent to $7.2 million) was stolen from users' deposits. Another incident was the alleged $6.5 million exit scam orchestrated by Magnate Finance, a borrowing and lending protocol deployed on Base. This exit scam was exposed by DeFi investigator zachXBT, leading to the removal of all assets from the protocol's smart contract, as well as the shutdown of its website and social media accounts. So far this year, users have lost a total of $1.25 billion to hacks and fraudulent activities, as per Immunefi data. In March, Euler Finance, a DeFi protocol, experienced a malicious flash loan attack resulting in a $195 million loss. However, the majority of the stolen assets were returned by the hacker after developers threatened legal action. The topic of banning ransomware payments has been a subject of debate, as it presents both attractive prospects and dangers.
Published At
8/31/2023 4:00:00 PM
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