- Certik reported that crypto scams, exploits, and hacks totaled $103M in April 2023.
- The total amount lost in 2023 to such activities was $429.7 Million.
2023 has been a relatively good year for the crypto industry; Bitcoin almost touched $31,000 in 11 months. But crypto con artists stole $103 Million from various crypto projects and investors in April 2023. They used exit scams, crypto exploits, and flash loans to carry out the acts.
Scammers Activity Rose in April 2023
On April 30, 2023, crypto security and auditing firm Certik posted its analysis on crypto exploits, scams, and hacks, revealing the total funds lost in April, which was $103.7 Million. This number brings the total year-to-date losses to $429.7 Million.
MEV Bots suffered an exploit worth $25,389,731 on April 3, 2023. Bitrue’s hot wallets were exploited for $22 Million, and the South Korean GDAC exchange lost $13; the losses of Terraport were $4 Million, and SushiSwap lost $3.3 Million.
Interestingly in April, the total losses incurred by crypto and DeFi amounted to $74.5 Million, while the total losses in 2023 were $145 Million. This means con artists were most active last month, stealing around half the total losses. Around $20 Million were lost in flash loan attacks; topping the list was Yearn Finance after a hacker exploited an old smart contract on April 13, 2023.
Certik noted that the funds lost to exit scams totaled around $9.4 Million. Merlin DEX lost $2.7 Million; the blockchain security firm reported that they were investigating a “potential private key management issue” at Merlin DEX. Moreover, the exit scam happened after the audit was completed, and they were warned of centralization issues.
The blockchain security and auditing firm launched a compensation plan after the attack, urging the developers to return 80% of stolen funds and offering the hacker a 20% white hat bounty.
Ordinals Finance lost $1 Million, 6827 Token lost $729,331, losses of fades were $674,853, and ZKLOTTO suffered $609,959 on April 26, 2023. Furthermore, according to DeFi’s Rekt Database, over 50 crypto exploits, scams, hacks, and rug pull events occurred in April. A significant portion of it was memecoin rug pulls.
On April 28, 2023, the Polygon-based Ovix protocol lost $2 Million in a flash loan attack.
How are the Authorities Planning to Deal With This?
Scams should not be taken lightly, and in 2021, the Department of Justice (DoJ) created the National Cryptocurrency Enforcement Team (NCET). This agency was charged with handling investigations and prosecutions regarding criminal misuse of cryptocurrency.
NCET would combine the expertise in Money Laundering and Asset Recovery Section and the Computer Crime and Intellectual Property Section to analyze the scams and punish the perpetrators carefully.
In 2022, the DoJ created the Digital Asset Coordinator (DAC) Network, which will work under the leadership of NCET, and designated federal prosecutors from the U.S. attorney’s offices spread across the U.S. shall be assigned to the DAC Network. At the same time, each office’s DAC will work as a digital asset subject matter expert and the first to investigate the source of information.
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