According to a new report, the last quarter proved to be the worst one this year yet in terms of the money lost to frauds and hacks.
A security services and bug bounty platform, Immunefi revealed that the third quarter of 2023 saw crypto investors lose $685.5 million, which is a 59% increase year-over-year from $428 million.
The amount stolen was 55.7% higher than the numbers recorded in the first quarter of 2023 and it was a 158.2% rise from the same quarter last year.
Almost half of the total amount that was stolen had been from two hacks that occurred on Multichain and Mixin Network, as the funds compromised were around $326 million.
In addition, in the first quarter of the year, almost 40.5% of the stolen amount had been recovered, which happened in two specific instances SperaxUSD and Euler Finance.
In the third quarter, there was a major decline in the recovery rate, as it fell to 8.9% of the total amount, with just $61.1 million recovered.
The report from Immunefi further revealed that 30% of the total losses that had occurred in the past quarter were due to the Lazarus Group.
The North Korean hacking group had stolen about $208,600,000. It had allegedly been responsible for the high-profile hacks that had targeted CoinsPaid, Stake, Alphapo, and CoinEx.
The CEO and founder of Immunefi, Mitchell Amado talked about the attacks that had been carried out by the Lazarus Group.
He said that the state-backed actors had played a key role because they had allegedly been responsible for a number of cases that had occurred in this quarter.
He also added that their particular focus on the centralized finance (CeFi) sector had resulted in a sharp increase in losses in the sector in this quarter.
As compared to its centralized counterpart, the DeFi (decentralized finance) sector took a worse hit, as it suffered 72.9% of the total losses.
Meanwhile, hacks in the CeFi sector like those on Alphapo and CoinEx, were about 27.1% of the total losses.
One of the top-targeted chains by hackers was Base, the blockchain incubated by Coinbase, BNB Chain, and Ethereum.
According to an Immunefi analyst, it is common for hackers to target blockchains that have a higher activity and have more funds at stake.
They further added that new chains had also become major targets for rug pulls and other fraudulent schemes due to airdrop farming hype related to new token releases and networks.
Crypto users implement the strategy of airdrop farming to get tokens from a new application or blockchain, which are retroactively distributed to community members.
In the third quarter, there was an increase in the number of incidents from 63 in the second quarter and 73 in the first quarter to a total of 76.
This number was also a year-over-year increase of about 153%, which shows that there is a significant increase in crypto frauds and hacks.