On May 22, a report from TRM labs was published which provides the data on the cryptocurrency attacks reduction in 2023. The report provides data on the number of attacks on cryptocurrency exchanges held in 2022 and compares it with the current year’s data.
According to reports, approximately USD 400 was stolen from 40 cryptocurrency exchanges in the first three months of 2023. It is 70% less than what it was in 2022, says the report. The report signifies that the current year has been very stable as compared to 2022. Additionally, the report shows that in Q1 2023, less money was lost through crypto attacks than in any other quarter of 2022. During this time, cryptocurrency values fell significantly, with Ethereum’s value falling by about 45%.
What’s more fascinating is that hackers are intending to return the stolen funds and choosing to claim bug bounty rewards or in other words “white hat” rewards also gaining prevalence. A case study of Tender.fi’s code has approved this report where the hacker stole over USD 1.5 million but later contacted and agreed to return the funds in exchange for a bug bounty of 62.15 ether, worth USD 850,000. There are several reasons behind the increasing trend of hackers adopting the “white hat” process. The growth in regulatory frameworks, attention towards hacking, and a dedicated workforce to track down hackers have further added wings to the monitoring.
With the constant focus on knowing your customer (KYC), anti-money laundering (AML) by the virtual assets service providers (VASPs) has boosted the security measures against hackers. For example, in 2022, the United States Treasury sanctioned Tornado Cash, a cryptocurrency mixer for laundering. According to reports, Tornado Cash was used to launder more than USD 7 billion worth of virtual currency since its creation in 2019.
The growth of the “white hat” hacking culture is a big booster as they play a crucial role in strengthening the digital ecosystem. Also, the role of cryptocurrency exchanges, regulatory bodies, and international forums is very important in tackling these incidents. Additionally, the TRM labs report also mentioned that this slowdown is a temporary relief rather than a long-term relief. A concrete indicator of what might be going on comes from the type of Bitcoin thefts, the scale of the slowdown, and knowledge gained from previous cycles. It will be interesting to see whether the slowdown in funds stolen will continue or the trend will be the same as in previous years.
