In the first quarter of 2023, hackers accessed over $320 million in the crypto industry through a variety of incidents, according to the quarterly report from blockchain security firm CertiK. While this amount is significantly lower than the $1.3 billion and $950 million lost in the first and fourth quarters of 2022 respectively, it is still a substantial sum.
CertiK notes that off-chain events may have played a role in the lower amount of losses seen in Q1 2023. For example, issues with Silvergate Bank and the depegging of USD Coin (USDC) may have had a broader impact on the crypto industry. However, despite these challenges, hackers still managed to exploit vulnerabilities in the system.
Out of the funds stolen within the quarter, over $31 million was lost to 90 exit scams, while more than $222 million was lost in 52 flash loan and oracle manipulation exploits. BNB Chain had the greatest number of incidents for the quarter, with 139 in total. Meanwhile, Ethereum had the most significant loss, with over $221 million lost.
Despite the lower numbers overall, Q1 2023 was still marked by substantial losses. 60% of the funds lost were due to the Euler Finance hack on March 13, where hackers exploited a flash loan to access over $195 million. However, negotiations with the hacker allowed Euler Finance to recover around 90% of the lost funds by April 4.
The trend of recovering funds through negotiations with hackers has become increasingly common in the crypto industry. Lending protocol Sentiment also recovered around $870,000 in April after giving a bounty of $95,000 to those responsible for taking almost a million dollars from the platform.
While it is encouraging to see funds being recovered in this way, it also highlights the need for continued vigilance in the industry. As long as there are vulnerabilities that can be exploited, hackers will continue to find ways to access funds. It is up to those in the industry to remain vigilant and take steps to ensure the safety and security of their platforms and assets.