By Brenda Collins
A recent study showed that there had been a sharp decline of about 70% in the number of crypto hacks and scams recorded so far this year than in 2022. Spectators believed increased scrutiny, law enforcement, and blacklisting were responsible for the new development.
The decentralized nature of cryptocurrency is a significant factor that makes it vulnerable to all manners of attacks and scams, as the culprit’s identity is always impossible to trace. Over the years, hackers have found new ways to penetrate a network, rapidly increasing the rate of cyber theft cases.
In 2022, a lot of high-profile attacks on crypto platforms occurred. Usually, this attack targets users’ funds on the affected network or smart contract. Cross-chain bridges are common targets as they get away with mouth-watering funds without being discovered.
However, since Q1 of 2022, there has been a sharp decline in criminal activities in the crypto space. TRMLabs, a cybersecurity firm, reported a 70% decrease in attacks on crypto platforms in its recent research paper.
Reports Show 70% Reduction In Stolen Funds
In the first quarter of 2022 alone, close to a billion dollars was reportedly stolen from the industry. In total, the report recorded that about $3.7 billion in crypto assets was stolen across different platforms by fraudsters in 2022.
However, far less was stolen in the Q1 of 2023 than it was in the Q1 of 2022. About $400 million was stolen in 2023 across 40 different hacking attempts. In addition, more cases of funds recovery were recorded in Q1 2023, as many victims got part of their lost funds back. A feat that was nearly impossible last year.
Also read:Meanwhile, it is challenging to pinpoint the exact reason for this massive decline in stolen funds. Many speculators attributed different reasons, like perpetrators developing a guilty conscience or being bored, and some said it might be an increase in security measures.
However, research experts at TRMLabs revealed in their research paper that the increased scrutiny and stringent regulation actions taken by financial regulators are majorly responsible for the drastic decrease in criminal activities on crypto platforms.
Strict Regulation Approach Reduced Scam Rates
Since many investors lost their fortunes last year, the regulators have been all out taking drastic measures to ensure the risks and theft rate in the industry reduces. Even in some exploit cases that did not defy the hacking laws, regulators still probe the situation.
For example, the United States SEC (Securities and Exchange Commission) filed a court case against Avraham Eisenberg over his allegedly illegal trading scheme. He was also sued for manipulating the product.
In addition, the rate of criminal exploitation has also drastically reduced ever since the US regulators sanctioned the notorious Tornado Cash network, which allows crypto criminals to steal funds with total anonymity. Following the sanction, the regulator blacklisted all crypto addresses linked with the platform. This makes it challenging for criminals to use the mixer to cash out their loot from other platforms.
However, the report by TRMLabs only covered the Q1 of 2023. This makes the drastic decline recorded quote temporary. However, financial regulators are increasing their activities in the crypto industry, trying to tame the rapidly growing space with harsh and stringent regulations, especially in the US.
At Tokenhell, we help over 5,000 crypto companies amplify their content reach—and you can join them! For inquiries, reach out to us at info@tokenhell.com. Please remember, cryptocurrencies are highly volatile assets. Always conduct thorough research before making any investment decisions. Some content on this website, including posts under Crypto Cable, Sponsored Articles, and Press Releases, is provided by guest contributors or paid sponsors. The views expressed in these posts do not necessarily represent the opinions of Tokenhell. We are not responsible for the accuracy, quality, or reliability of any third-party content, advertisements, products, or banners featured on this site. For more details, please review our full terms and conditions / disclaimer.