DeFi Hacks Steal Almost Half a Billion in 2023

In Brief

• Blockchain security firm PeckShield reported $480 million stolen from decentralized finance projects in H1 2023.
• Ethereum, the blockchain with the highest TVL, recorded the most losses of $287 million in the same period.
• Attacks came mainly from logic exploits in smart contracts, oracle manipulation, and privilege exposure attacks.

Blockchain security firm PeckShield has confirmed that criminals stole $480 million through smart contract DeFi hacks in the first half of 2023.

According to the firm, the three main decentralized finance (DeFi) attacks were logic bugs, oracle manipulation, and privilege exposure.

DeFi Hacks Down, but Ethereum Still the Main Target
Despite coming in at under half a million, DeFi criminal activity for the first half of the year fell about 75% compared to 2022. Last year, the proceeds from crypto hacks reached a whopping $2.5 billion.

Ethereum, the blockchain with the highest total value-locked, was the blockchain criminals targeted the most, racking up $287 million in losses.

Logic errors refer to mistakes the developer makes when coding a smart contract. These mistakes can be costly if hackers use them to redirect funds.

Oracles are off-chain data sources that smart contracts use to make decisions. Oracle manipulation involves altering the quality and speed of incoming data to affect the decisions a smart contract makes.

Chainalysis Report Confirms Lower Crime in 2023
This year marked notable breakthroughs in reducing the funds lost to crypto crime. Earlier this month, Chainalysis confirmed that the flow of illicit funds to suspicious addresses dropped in the first half of the year.

However, the number of ransomware attacks increased as criminals tried to squeeze funds out of parties still willing to pay. Ransomware attacks deny access to important software and data until the victim pays a requested amount.

The number of impersonation scams also rose in the year’s first half.

New tools like AnChain.ai’s are helping governments track money laundering and white-collar crime. The company detects logic and other errors in smart contracts using artificial intelligence.

Its competitor Cyver.ai establishes a baseline for activity on a blockchain to flag suspicious on-chain transactions immediately.

Blockchain intelligence firm Arkham was recently criticized for doxxing crypto users through its new forensics marketplace. The platform connects buyers and sellers of on-chain data.

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