The cryptocurrency landscape is a dynamic and highly valuable market. With over 10,000 cryptocurrencies distributed across 1,000+ blockchains and a global user base exceeding 560 million, the market is currently valued at more than $2 trillion. This immense growth has attracted investors, financial institutions, and governments worldwide.
However, this lucrative industry has also become a magnet for malicious actors. From hacks to scams, security breaches have emerged as one of the most pressing challenges in the crypto space. Below, we delve into key statistics shaping crypto security in 2024.
Over 20% of Bitcoin Is Potentially Lost
Bitcoin (BTC) remains the cornerstone of the crypto ecosystem, being both highly popular and immensely valuable. Yet, a significant portion of Bitcoin has gone missing over the years. Blockchain analytics platform IntoTheBlock estimates that approximately 29% of BTC has not moved in over five years.
While some of this Bitcoin is likely held by long-term investors following the “Hold On for Dear Life” (HODL) philosophy, experts believe a substantial amount is lost forever. These losses often stem from forgotten passwords, misplaced private keys, or inaccessible wallets.
Fortunately, all hope is not lost. Depending on the circumstances, specialized crypto recovery experts can assist in reclaiming Bitcoin locked in inaccessible wallets.
Crypto-Related Losses Surge in the First Half of 2024
Beosin reports that total losses due to crypto hacks and scams in H1 2024 reached $1.54 billion, more than double the $670 million recorded during the same period in 2023. The uptick in losses coincides with rising cryptocurrency valuations, amplifying the financial impact of breaches.
This represents a shift from 2023, when total losses declined to $1.7 billion—a significant drop from the $3.7 billion lost in 2022, the worst year in crypto security history. Chainalysis attributes 2023’s decline to fewer DeFi protocol hacks, as preventive measures improved in response to earlier vulnerabilities.
If the trend observed in early 2024 continues, the latter half of the year could see a notable reversal, underscoring the ongoing challenges in securing crypto assets.
Centralized Platforms Suffer the Most in 2024
According to Beosin, centralized exchanges (CEXs) experienced the largest losses among crypto platforms in H1 2024, with four incidents resulting in a combined loss of $392 million—32.8% of all losses this year.
In comparison, gaming platforms saw $389 million in losses (32.6%), followed by DeFi platforms, which reported $157 million across 38 incidents—the highest number of cases among any platform type.
This marks a dramatic shift from 2023, when CEX-related losses totaled $256 million across seven incidents.
Compromised Private Keys Drive 75% of Hacks
Private key compromise was responsible for 33% of DeFi-related hacks in 2023, a figure that skyrocketed to 75% in H1 2024, per Beosin’s report. Private keys serve as the “master key” to crypto wallets, granting full access to stored assets. Their compromise can result in devastating financial losses.
Notable incidents in 2024 include:
- DMM Bitcoin: $300 million lost
- Ripple Co-Founder’s Wallet: $112 million lost
- PlayDapp: $290 million lost
- BtcTurk: $55 million lost
Atomic Wallet Breach Exposes Vulnerabilities
In July 2023, Atomic Wallet—a non-custodial crypto wallet—was hacked, resulting in a $129 million loss. Although the exact details remain unclear, compromised private keys and seed phrases are believed to have enabled attackers to access users’ funds.
The FBI linked the attack to TraderTraiter, a North Korean hacking group also behind breaches of Alphapo ($23 million) and Coinspaid ($37 million).
North Korea-Linked Hacks Persist
North Korean hacker groups such as Lazarus, Kimsuky, and TraderTraiter remain active threats. In 2022, these groups were responsible for 20 hacks, stealing $1.7 billion across various platforms.
Though the total value of North Korea-linked hacks declined in 2023, their frequency rose, signaling persistent risks in the crypto sector.
Ethereum Remains the Most Targeted Blockchain
According to De.Fi’s annual report, Ethereum suffered the highest losses to hacks, scams, and exploits in 2023, with $1.35 billion lost across 170 incidents. This trend has continued into 2024, with Ethereum accounting for 39.4% of total losses ($470 million) in H1 alone.
Other notable blockchains include:
- BNB Chain: $110 million lost across 213 incidents
- zkSync Era: $5.2 million lost in two incidents
- Solana: $1 million lost in a single incident
Approval Phishing Scams: A Persistent Threat
Approval phishing scams—where victims unknowingly grant permissions to malicious actors—cost users $374.6 million in 2023. This marked an improvement from the $516.8 million lost in 2022.
Despite these reductions, scammers continue refining their methods, underscoring the need for vigilance when interacting with unknown contracts or platforms.
H2 2024: A Critical Outlook
With crypto losses already surging in early 2024, the industry faces mounting challenges as valuations increase. As hackers grow more sophisticated, ensuring robust security measures is paramount for traders, investors, and platforms alike.
Key steps include safeguarding private keys, conducting regular audits, and using trusted platforms to reduce the risk of breaches. As crypto adoption expands, the importance of proactive security practices cannot be overstated.