Cryptocurrency losses due to hacks and scams fell by $452 million in the first quarter of 2023, according to De.Fi, an antivirus and app provider firm.
In its most recent report, titled “Report: $452 million Lost in Crypto in Q1 2023. New Trends of Hacks and Scams”, the firm reported that this was a 65.23 percent decline from the $1.3 billion recorded in the prior year’s similar quarter.
According to the report, crypto losses reached the nine-figure mark in March for the second time in a row. It claimed that $215 million was lost in March alone.
“Out of the $452 million lost in Q1, a total of $215 million was lost in just the first 20 days of March, underscoring the rapid pace at which scammers have been operating in recent weeks,” the firm observed.
“While these losses are staggering, they are also lower than the same period in 2022, when $1.3 billion was lost in Q1.”
It pointed out that the highest losses in the first quarter were due to flash loan issues, which had been on the rise in recent months, with more than $200 million lost through the channel.
According to the firm, which claims to have the largest database of breaches, frauds, and exploits in the cryptoverse, the Ethereum chain had the highest losses in the quarter.
In terms of recovery, “$130 million was recovered in the first quarter of this year, representing a 28.7 percent recovery rate.”
In the same period in 2022, $520 million, or 40% of funds, were recovered. In Q1, scammers used new tokens to entice naive crypto investors.
“In terms of attack vectors, tokens have proven to be the most popular targets this year so far — this is unsurprising given that tokens are easy to deploy and prey on the fear of missing out experienced by many new crypto investors,” the business claimed.
“This is especially true given the recent market rebound.” In terms of total losses, lending and borrowing protocols grabbed first place, owing to a small number of high-profile occurrences — Euler Finance and BonqDAO.”
Euler ($196m), BonqDAO ($120m), CoinDeal ($45m), Monkey Drainer ($16.5m), and Platypus Finance ($8.5m) were among the crypto platforms whose investors lost the most money.
De.Fi concluded by saying that the considerable increase in financial losses in Q1 emphasized the necessity for investors to exercise greater risk management and awareness while participating in the decentralized finance sector.
“It is critical for investors to educate themselves on potential risks and put appropriate safeguards in place to protect their investments,” it added.