The cryptocurrency sector faced a devastating blow in May, losing a staggering $42.6 million to various vulnerabilities such as flash loan attacks, exploits, and exit scams. Despite efforts to recover approximately $96.2 million, the economic impact of these incidents cannot be ignored. Flash loan attacks emerged as the primary cause of losses, accounting for around $20.7 million. Sonne Finance took the hardest hit, losing $20 million, followed by TLN Protocol at $746,000. Additionally, GPU and Saturn Token suffered losses of $32,394 and $8,343, respectively.
Exploits also played a significant role in the losses, totaling approximately $19.7 million. Gala Games bore the brunt of the impact, losing $21.6 million, while other projects like AlexLab, Pump Fun, GNUS.ai, and Orion faced losses ranging from $947,000 to $1.28 million. These incidents highlight the vulnerability of projects within the cryptocurrency sector to malicious actors seeking to exploit weaknesses in their systems.
Exit Scams and Trends
Exit scams, though less common, still contributed approximately $1.8 million to the overall losses in May. Trees On Sol, Pii Park, Novamind, and Arbalest were among the projects affected, losing amounts ranging from $91,520 to $1.11 million. Interestingly, a trend emerged where odd-numbered months saw higher losses from flash loan attacks, with January, March, and May recording losses of $15.3 million, $21.9 million, and $20.7 million, respectively. In contrast, losses in February and April were significantly lower, staying under $150,000.
Furthermore, the year-to-date data for 2024 revealed that over $473 million worth of cryptocurrency was lost to hacks and rug pulls across 108 incidents. The decentralized finance (DeFi) market remained a primary target for hackers, while centralized finance companies emerged unscathed. In the previous year, the sector saw losses of over $2 billion due to hacks and exploits, indicating a concerning trend of vulnerability within the cryptocurrency space.
Targeted Chains and Ongoing Challenges
In May 2024, Ethereum and BNB Chain were the most targeted chains, representing 62% of the total losses across all targeted chains. Despite efforts to enhance security measures, cryptocurrency hacks and exploits continue to pose a significant threat to the sector. A recent hack at DMM Bitcoin, a Japanese cryptocurrency exchange, resulted in the loss of 48 billion yen ($305 million) worth of Bitcoin. This incident serves as a stark reminder of the ongoing challenges faced by the cryptocurrency sector in ensuring the security of digital assets and protecting investors from malicious activities.
