The cryptocurrency sector, especially decentralized finance (DeFi), experiences hacks on various protocols within its ecosystem regularly . However the latest report from blockchain analytics firm TRM Labs indicates a huge 70% decrease in stolen cryptocurrency amounts during the first quarter of this year .
Blockchain Analytics Firm Reports Significant Decline in Stolen Cryptocurrency Amounts
TRM Labs’ report reveals that the total stolen amount equated to approximately $400 million which shows a significant drop compared to previous quarters . Although the number of attacks remains similar to the first quarter of 2022 with less than forty incidents this year compared to over forty incidents last year, the decrease in stolen amounts outpaces the drop in cryptocurrency prices, particularly with ETH experiencing around a 45% decline .
Number of Attacks on Decentralized Finance (DeFi) Remains Steady Compared to Last Year
Furthermore the average money obtained by hackers in the past quarter was $10 .5 million which is a notable decrease from $30 million in the first quarter of 2022 . TRM Labs also highlights a growing tendency among hackers to return stolen funds and that can be exemplified by the recent case of Euler Finance where assets worth nearly $197 million were eventually returned to their rightful owners .
Hackers Return Stolen Funds as Trend Emerges, Highlights Report
While the decline in stolen cryptocurrencies is a positive development it is vital to approach this trend with caution . Given the relative youth of the cryptocurrency ecosystem a single attack has the potential to disrupt the entire landscape . That’s why it is necessary to evaluate trends over several years to fully comprehend the value of stolen amounts and the frequency of attacks in correlation with market movements .
The report from TRM Labs also emphasizes that 75% of the funds stolen in 2022 were concentrated in only 10 hacking incidents . Additionally the similarities between the first quarter of this year and the third quarter of the previous year which ended disastrously make 2022 the worst year for cryptocurrency hacks .
While the arrest of individuals like Avraham Eisenberg, the manipulator of the Mango Market protocol, may deter isolated actors from engaging in such activities it may be less effective against “professional” groups like Lazarus which is a notorious North Korean hacker group . Consequently the long-term solution to reduce hacks within the industry lies in making them less profitable, primarily by continually prioritizing the security of DeFi applications .
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