Web3 Hackers Target Big Fish, But Sector’s Recovery Hits 54%: Hacken

The first quarter of 2024 witnessed over $824 million across 67 hacks as bad actors became more active in targeting high-profile individuals and projects.

According to the latest Hacken report shared with CryptoPotato, breaches in access control emerged as the most frequent category of hacks in terms of both frequency and financial impact, with $682 million being siphoned away. This constituted 83% of the total funds stolen during Q1 2024, spread across 26 separate incidents.

Access Control Breaches Reign

Four major incidents alone comprised 66% of the total losses. These included the $290 million breach at the gaming platform Playdapp, the $112 million incident involving Ripple co-founder Chris Larsen’s wallet hack, the $80 million hack of the Orbit chain bridge, and the $63 million exploit of Munchables, a Web3 gaming protocol on Blast.

Each of these breaches was characterized by unauthorized access, which essentially highlighted access control breaches as the most impactful exploit type during Q1 that allowed hackers to infiltrate critical system components.

Token projects also bore the brunt of hacking activity, with 19 reported incidents, followed by other projects at 10 incidents and lending protocols at 9 incidents. Gaming platforms, led by Playdapp’s substantial losses, suffered the most significant financial hits, followed by Munchables.

Breached wallets belonging to notable individuals, DAOs, tokens, bridges, and CeFi platforms constituted the second-largest category of losses, exemplified by incidents involving figures like Chris Larsen, Jeffrey Zirlin, and AirDAO.

Ray of Hope?

Despite the staggering losses during the first quarter, Hacken found that approximately $444 million was successfully recovered or frozen from various hacks and exploits, equivalent to 54% of the amount stolen. The firm noted that such a recovery effort marks a notable advancement in the industry’s responsiveness to such incidents.

Measures like hackers returning funds for bounties, as seen in the Seneca Protocol hack and Dolomite case, and intervention by white hat hackers, such as @coffeebabe_eth disrupting and returning funds in the Blueberry protocol hack, contributed to this recovery.

The proactive steps taken by project teams and white hat hackers played a crucial role in recovering stolen funds and minimizing further disruptions. While the total amount hacked in this period was substantial, recovering more than half of the stolen funds represents a significant positive development for security and resilience in the industry.

While speaking to CryptoPotato, Edgar Pavlovski, Hacken’s Senior Blockchain Researcher, explained,

“The beginning of this year spawned more of the same – losing control of one’s private key remains the largest vector of attack, accounting for 83% of all funds lost. On the bright side, more than half of all stolen funds were either returned or frozen. This represents big advancement compared to previous years, and we expect this dynamic to continue improving over time.”