Web3 Losses Hit $1.19B Amid Advocacy for Enhanced Safety, Per CertiK Security Report 2024

Blockchain security firm CertiK recently released its “Hack3d: The Web3 Security Quarterly Report” for Q2 2024, highlighting a concerning trend of rising financial losses in the Web3 space. While the number of security incidents decreased by 18% compared to Q1, the total value lost due to hacks and scams surged by 37%, reaching a staggering $688 million.

The most recent CertiK Web3 Security Report shows that on-chain security events in the first half of 2024 have cost $1.19 billion, which calls for better security protocols.

With phishing assaults accounting for roughly $498 million, the research notes that most of the losses were caused by private key compromises and phishing attempts.

Ronghu Gu, the co-founder of CertiK, explained the need for multifactor authentication—that is, two-factor authentication (2FA) and “security keys” in conversation with newsmen. He stated, 

“All wallets with significant funds should be interacted with using a hardware wallet or similarly secure and well-designed key management solution.”

With $304 million stolen, the DMM Bitcoin assault was the second most important hack in history among the security lapses in 2024. Following a hack that resulted in the theft of 4,502.9 Bitcoin BTC, the Japanese crypto exchange strengthened security on the site to prevent such theft in the future.

Another episode involving the Turkish cryptocurrency exchange BtcTurk included a cyberattack aimed at hot wallets, which caused a $90 million loss.

Gu told the news outlets that the most recent breaches reveal “attackers are still out there” seeking to test the defences of big crypto custodians.

“It’s important to put proactive measures in place and a highly reactive response team for when an incident occurs.”

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Moving forward, the regulatory framework bill FIT21, Introduced and passed in the United States, came amid the losses suffered during the first half of 2024.

Through its all-encompassing regulatory digital asset framework, the FIT21 bill seeks to enhance consumer safeguards and foster crypto industry innovation. Supported by both sides, the measure will likely produce a safer and better-regulated environment for American digital asset exposure.

Gu said the FIT21 measure “will probably attract more institutional investors and drive greater compliance efforts and requirements across the industry.”

CertiK’s analysis presents a worrying picture of Web3 security, but Gu says, “The trend is not pointing downward.”

Though Gu’s point of view and crypto attacks resulted in about $385 million in May, exploits and hackers dropped by 54.2% in June. From May to June, $176.2 million was lost to crypto attacks, according to PeckShield data—a significant drop from earlier months.

Gu told reporters that although the extent of losses could be “just a part of the industry” for now, there are also “simple measures” all users can do to guard themselves, such as 2FA.

Conclusions Of The CertiK Security Report

The conclusions of the CertiK Web3 Security Report indicate that the cryptocurrency industry will face considerable hurdles during the first half of 2024. Losses totalling $1.19 billion, the majority of which can be traced to phishing attempts and compromised private keys, highlight the need to strengthen security standards.

Ronghu Gu’s recommendation for multifactor authentication and secure key management solutions emphasizes proactive measures to mitigate risks. Concurrently, regulatory developments such as the FIT21 bill in the United States aim to enhance consumer safeguards and foster industry innovation. Despite a notable decline in crypto exploits from May to June, ongoing vigilance and user education remain crucial to navigating the persistent threat landscape in Web3 security.