Note that hackers in the cryptocurrency industry cause serious problems, but they are sometimes successfully dealt with. In particular, the arrest of Chase Senecal under the alias Horror (HZ) came to light in late winter.

He was actively stealing expensive NFT tokens, but a photo of his own watch eventually turned him in. It was these that revealed the identity of the fraudster, who was unknown at the time.

What is particularly noteworthy: the case was handled by the FBI.

How money is lost on cryptocurrencies

According to Cointelegraph’s sources, almost half of the $215 million equivalent losses for the entire quarter came in the first three weeks of March.

Leaders in terms of hacking losses were the hacking incidents of the Euler Finance platform and the Bonq decentralised autonomous organisation (DAO). We are talking about $196 million and $120 million, respectively.

For comparison, here is a similar graph for the first quarter of 2022. As can be seen, similar figures last year were significantly higher. Apparently, this trend is now explained by a prolonged bearish trend in the cryptocurrency industry. Still, there are far fewer newcomers interacting with digital assets today than at the beginning of 2022. Back then, only a month and a half had passed since Bitcoin’s record high of $69,000, so many investors were hoping for a continuation of the bull run.

Well, where there are users of digital assets, there are losses provoked by hackers.

Analysis of the data on the blockchain showed that Dai 8.7 million, $18.5 million in WTC, $135.8 million in stashed Etherium tokens and $33.8 million USDC were stolen from Euler Finance. The hackers used a multichain bridge to transfer funds from Binance Chain to the Etherium blockchain.

After successfully moving the coins, the main phase of the attack began. And to cover their tracks, the stolen funds were transferred to cryptomixer Tornado Cash.

As a reminder, the platform is under US sanctions. This means that US companies are now not allowed to interact with blockchain addresses that previously transacted with the platform.

The DAO Bonq incident happened on February 2, with a $120 million loss at the time due to a vulnerability in the platform’s smart contract. The project team had to suspend trading and deposits into liquidity pools to prevent the stolen tokens from being converted into other assets.

In terms of comparison to the first quarter of 2022, the situation is much worse in the context of stolen funds. Since the beginning of 2023, cybersecurity experts have managed to recover $130 million worth of crypto, which is 28.7 per cent of all stolen funds. Meanwhile, in the first quarter of 2022, $520 million or almost 40 per cent of all stolen assets have been recovered.

The “champion” in terms of the number of reported fraud incidents or hacking activity was the blockchain Binance Chain, accounting for 18 out of 51 hacks. Second place goes to Etherium with 10 episodes out of a total of 51.

The largest losses this quarter were related to so-called flash-loan attacks, which have become increasingly common in recent months. Hackers managed to make about $200 million this way.

We wrote more about this type of attack in this article. We recommend that you read it in order to better understand what is happening.

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In terms of the frequency of attacks, the most popular method was the exploitation of vulnerabilities in smart contracts. For a list of other attack methods, see the chart below.

In terms of attack vector, tokens proved to be the most popular targets for fraudsters this year. Dummy tokens are relatively easy to create: you can simply copy the smart contract code of other coins. Here, scammers are banking on the fear of lost profits with first-time investors by actively PRing their project. Such a scheme is particularly relevant against the backdrop of market growth over the last couple of months.

However, the losses from this attack vector in dollar terms turned out to be among the lowest, amounting to about $15 million. Hacking and exploitation of vulnerabilities in decentralised finance lending platforms caused the most damage.

Unfortunately, the problem of fraud and hacking in crypto is unlikely to ever go away. It remains one of the main obstacles to big investors wanting to invest more capital in the industry. Hopefully, in the future, the numbers in analyst reports will be smaller and cryptocurrency investors will become more sophisticated. However, a lack of technical understanding of blockchain and their gullibility are often used to steal digital assets from individual users.


We believe that the cryptocurrency industry will never be completely free of fraudsters. After all, such coins are decentralised, meaning it is impossible to remove them from full-fledged non-custodial wallets. Well, such a feature is already enough for increased attention of hackers, who are satisfied with what is happening together with the possibility of storing stolen assets for a long period of time.