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Web3 Projects Lose Over $168 Million In One Week

Web3 Records $168M Loss from Cyberattacks

Last week was tumultuous for Web3, with projects and investors losing over $168 million due to cyberattacks and exit scams. The previous week was already marked by more than $3 million in losses due to rising exit scams.

Blockchain cybersecurity firm SlowMist recently disclosed alarming statistics covering incidents between November 11 and November 25. The report highlighted a substantial increase in exploits ($168 million in losses), significantly surpassing the prior week’s $138 million damage.

HTX Suffered $113.3 Million Loss

Key among these incidents was an attack on HTX (formerly Huobi) protocol and Heco Bridge, resulting in a $113.3 million loss. Another blow was struck at Poloniex, linked to TRON’s Justin Sun, wherein the attacker compromised the bridge’s operator wallet, stealing approximately $87 million.

Kyber Network also faced a significant theft of $54.7 million across multiple blockchain networks. SlowMist’s detailed analysis of the November 23 attack on the KyberSwap Elastic pool revealed that the malicious actors exploited the Reinvestment Curve feature, causing unexpected token calculations and subsequent losses.

Moreover, the compromise of Kronos Research’s API key led to losses totaling 13,008 ETH, valued at nearly $26.2 million.

Escalation Of Exit Scams

The distressing trend extended to exit scams, particularly on Binance Smart Chain and Ethereum networks. Fourteen instances involving liquidity withdrawals led to collapses in various token prices, surpassing $3 million within a week.

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Furthermore, Rug pulls, a common type of crypto scam, spiked, with scams involving GIGS, DARK, WEB, and TPAD, resulting in nearly $1 million combined losses.

Impersonation And Scams Targeting SlowMist

Additionally, cybercriminals attempted to steal SlowMist’s identity, creating fraudulent websites mimicking the cybersecurity company. Thirteen instances of such scams were identified, employing redirected URLs and utilizing the company’s logo and brand to orchestrate wallet and trading platform scams.

Cybersecurity specialists revealed that the IP address linked to these fraudulent activities hosted a network of 124 scam websites, unveiling intricate connections with gambling websites.

Hong Kong Launches Investigation Into Alleged Hounax Crypto Scam

Meanwhile, Hong Kong’s financial watchdog, the Securities and Futures Commission (SFC), flagged Hounax as a suspicious virtual asset trading platform earlier this month. The move comes after reports from 131 individuals claiming losses totaling HK$120 million ($15.4 million) over an alleged scam by Hounax.

The local authorities in Hong Kong have initiated a probe into the matter. Reports indicate that victims, ranging from 19 to 78 years old, fell prey to the scam, with a retired woman reportedly losing HK$12 million to the fraudulent scheme.

Deceptive Practices Of Hounax

Chan Wai-kei, superintendent of the Commercial Crime Bureau, elaborated on the scammers’ modus operandi, stating that investors were enticed to invest in cryptocurrencies through the platform. But they couldn’t withdraw when they made withdrawal requests.

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The SFC’s recent warning highlighted discrepancies in Hounax’s claims, asserting false affiliations with financial institutions and venture capital firms. The platform, alleged the SFC, projected a façade targeting Hong Kong investors with tailored social media channels and localized login interfaces.

Thus, Lawmaker Johnny Ng urged the SFC to proactively identify and disclose unlicensed crypto trading platforms to mitigate risks. This investigation follows similar scrutiny into JPEX, another crypto trading platform, in September.

The JPEX investigation revealed that over 2,600 victims fell for the scam, losing approximately HK$1.6 billion, while authorities arrested 66 individuals. Meanwhile, Taiwan prosecutors have detained key personnel associated with JPEX Taiwan over alleged banking and anti-money laundering laws violations.

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Bradley Nelson

Bradley Nelson is a US based cryptocurrency news writer for Tokenhell, he helps readers stay up to date with the latest trends and news from the blockchain and crypto world. Bradley has been a crypto enthusiast since 2018.

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