May 2023 was a bumpy ride for the cryptocurrency market as scams and hacking incidents led to cumulative losses of over $54 million, according to a recent report by security firm De.Fi. Although this figure is significantly lower than April’s losses, which reached $101.5 million, no funds were recovered in May. Despite the drop in losses, the absence of recoveries raises concerns about the overall ecosystem’s safety.
A large part of these losses, over $37 million, were attributed to the BNB Chain ecosystem across ten cases. In contrast, Ethereum-based projects experienced the lowest number of exploits at just over $2 million. Among the top ten cases, Fintoch suffered the highest loss of $31.7 million due to a smart contract exploit. Other notable losses included Jimbo Protocol and Deus Finance, with damages amounting to $7.5 million and $6.2 million, respectively.
Rug pulls emerged as the most prevalent form of scam, accounting for twelve instances and resulting in total losses of $37 million. The phrase “rug pull” refers to a type of crypto scam where developers build a project’s hype, only to drain the liquidity once the tokens are offered to the public. Meanwhile, exploits caused nine cases with losses of $8.8 million.
Flash loan attacks, despite being less common, were still a significant threat, responsible for five instances that led to damages totaling $8.9 million. These types of attacks occur when traders manipulate project token prices using unsecured funds from lenders, which smart contracts cannot detect.
Governance tokens composed the most commonly targeted category, reporting 19 cases and $3.3 million in losses. Decentralized exchanges (DEX) saw three instances with $4 million in damages, and a single stablecoin case resulted in a loss of $6.2 million. Nevertheless, some sectors remained unscathed during this period, including yield aggregators, gaming, non-fungible tokens (NFTs), and centralized crypto platforms.
While May’s reduced losses may suggest improved security practices among users and developers, the lack of recovered funds is a cause for concern. The cryptocurrency ecosystem must work tirelessly to ensure stricter protocols are implemented, and ongoing education is provided to combat scams and diminish incidents of hacking. Users should remain vigilant and stay abreast of the latest security measures in order to help safeguard their assets from potential threats.
Source: Coindesk
