Emmanuel Ochayi
Crypto Losses Decline in June
The month of June witnessed a notable decline in crypto hacks and exploits, with net losses dropping by 54.2% compared to May.
The industry recorded a net loss of $176 million, significantly lower than May’s staggering $385 million. This reduction comes as a relief to the crypto community, which has been grappling with increasing cyber threats.
Join our WhatsApp ChannelKey Incidents in June
Crypto analytics firm Peckshield reported approximately 20 hacking incidents in June, culminating in a net loss of $176 million. Peckshield’s report detailed the losses across various crypto exchanges:
- BtcTurk Exchange: The largest exploit of June occurred on BtcTurk, with hackers stealing over $100 million in crypto assets. Early estimates from on-chain watcher ZachXBT suggested losses of around $55 million.
- Lykke Exchange: The second-largest exploit involved the centralised exchange Lykke, suffering losses of $22 million.
- UwU Lend: The decentralized finance (DeFi) lending protocol UwU Lend faced a $19.4 million loss, making it the third-largest exploit in June.
- Holograph and Velocore: Holograph and Velocore, both decentralised exchanges, experienced losses of $14.4 million and $6.8 million, respectively.
Centralized Exchanges Hit Hard
Centralised exchanges bore the brunt of the major hacks in June. This trend of targeting centralised exchanges has been consistent throughout 2024.
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In May, the crypto industry faced its largest monthly loss to hacks for the year, with $385 million worth of crypto assets stolen.
The most single loss in May was on May 31, when a private key hack of the crypto exchange DMM resulted in $305 million worth of Bitcoin being drained from the exchange. Besides May, February saw net losses of $360 million, while April had the lowest with $60.19 million.
Quarterly Overview
In the second quarter of 2024, centralised exchange hacks and exploits constituted a substantial portion of the industry’s losses.
The total losses from centralised protocols and exchange exploits amounted to $401 million, representing 70% of the overall losses.
Despite this, data revealed that centralised exchanges were breached fewer times than decentralised exchanges during the quarter.
Understanding Centralised and Decentralised Exchanges
- Centralised Exchanges (CEXs): CEXs are online platforms acting as intermediaries between buyers and sellers of digital assets like cryptocurrencies. They operate similarly to stock exchanges but are tailored for digital assets. Examples include Binance and Coinbase.
- Decentralised Exchanges (DEXs): DEXs are peer-to-peer marketplaces allowing direct transactions between cryptocurrency buyers and sellers. Unlike CEXs, DEXs do not require intermediaries. They use smart contracts and a blockchain or distributed ledger to record transactions, reducing single points of failure. Examples include Uniswap and PancakeSwap.
Industry Response
Industry experts emphasize the importance of robust security measures to mitigate losses from hacks. “The decrease in losses this June is encouraging, but we must remain vigilant,” said a spokesperson from Peckshield. “Continuous improvements in security protocols are essential to safeguard assets.”
Despite the decline in losses, the crypto industry must address vulnerabilities to prevent future exploits. As hackers evolve their tactics, exchanges and users alike must prioritise security to protect their investments and maintain trust in the digital asset ecosystem.
Emmanuel Ochayi is a journalist. He is a graduate of the University of Lagos, School of first choice and the nations pride. Emmanuel is keen on exploring writing angles in different areas, including Business, climate change, politics, Education, and others.
