Report Reveals 70% of Hacked Crypto Funds Lost Via CeFi Entities

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Immunefi, a prominent security company, has released a report regarding crypto hacks in the second quarter of 2024. The report revealed that centralized finance (CeFi) entities overtook DeFi in crypto hacks, accounting for over 70% of funds lost to crypto-related hacks.

Moreover, CeFi losses via hacks and fraud amounted to over $401 million for the second quarter of 2024.

CeFi Entities Account For Over 70% of Losses of Crypto Funds Via Hacks

The latest Immunifi report disclosed that centralized finance entities have become the major target for crypto exploits and hacks in 2024.

While decentralized finance (DeFi) saw just 30% of the overall losses in Q2 2024, CeFi accounted for 70% of losses from crypto-related hacks over the same period. 

According to the report, crypto losses in Q2 2024 amounted to approximately $572.7 million. This figure is nearly double (a 42% increase) the $265.5 million in losses recorded over the same period in 2023.

The report also showed that a whopping $401.4 million in digital assets were lost on centralized finance platforms across five hack incidents. This figure represents an approximately 984% surge from the $37 million in the same quarter of 2023. 

Conversely, DeFi entities lost only about $172.1 million worth of crypto assets through 62 incidents. The value reflects a 25% decline from the $228.48 million recorded in the same period in 2023.

Immunefi founder and CEO Mitchell Amador reacted to the overall trend in crypto exploits and losses for the quarter.

He stated: “This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages.”

Similarly, blockchain and Web3 security company Cyvers reported the growing crypto hacks through centralized entities. The company’s co-founder and CEO, Deddy Lavid, confirmed the increased volume of lost crypto funds via hacks from CeFi entities.

🚨 2023 had staggering $1.7B in hack losses, but 2024 is expected to be much worse with $1.38B lost in the first half of the year!

Cyvers' Q2 2024 report shows a 35% rise in crypto losses, with centralized exchanges facing the brunt 📊

Read More:https://t.co/WPvDOxzeIK…

— Cyvers | Proactive Web3 Security (@Cyvers_) July 8, 2024

Comprehensive Security Approach in the Crypto Industry

Over the years, the crypto industry has experienced several exploits and scams, resulting in enormous investor losses. Moreover, vulnerabilities and the associated lapse trends call for comprehensive and enhanced security approaches on crypto platforms and wallets.

The Indian crypto exchange WazirX lost over $230 million through an exploit on July 18. This incident reflects the second-largest crypto attack so far in 2024.

Also, Cyvers recognized the need for a holistic approach to Web3 and crypto security. The company acknowledged that security should be in all networks, not just individual projects. 

Cyvers also noted some essential steps to securing funds on crypto platforms. These include addressing technological and human factors that cause vulnerabilities. 

Further, the security company pointed out the place of artificial intelligence (AI) in bolstering Web3 and crypto security. 

Cyvers stated:

“By integrating AI and real-time monitoring, we aim to stay ahead of these threats. The shift toward securing entire networks, not just individual projects, is crucial. This approach, especially within the growing wave of L2 networks, enhances our ability to protect assets and mitigate risks, making it increasingly challenging for hackers to succeed.”