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Crypto hacks down 70% in Q1 2023: TRM Labs

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A new report by the blockchain intelligence firm TRM Labs reveals that $400 million was lost to crypto hacks in Q1 2023. Regulatory and enforcement actions seem to be the likely causes behind this decline.

Crypto hacks down 70% in Q1 2023: TRM Labs

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  • $400 million was lost to crypto hacks in Q1 2023, a new report reveals.
  • However, the amount is 70% down compared to the funds lost during Q1 2022.

Hackers stole over $400 million from crypto projects during 40 attacks in the first quarter of 2023, a new report published by blockchain intelligence firm TRM Labs revealed.

According to the report, the amount of funds lost in Q1 2023 is 70% down compared to the amount lost in Q1 2022. However, the amount lost was actually less than in any other quarter of 2022.

The average hack size decreased as well, dropping from $30 million in Q1 2022 to $10.5 million in Q1 2023.

The report also adds that hackers are increasingly returning the money they stole in exchange for a “white hat” reward from the affected projects. In 2023, hack victims recovered over half of the stolen funds.

Notably, a hacker who stole $1.5 million from Tender.fi in March returned the funds after earning a bounty worth $850,000.

Reasons behind this decline

The report also investigated the likely causes of this decline in crypto attacks.

There is increased regulatory scrutiny of crypto hacking, as well as a handful of high-profile enforcement cases. Crypto exchanges are tightening their KYC/AML standards, making it more difficult to cash out stolen coins.

Furthermore, ETH mixing protocol Tornado Cash, which has been one of the most popular money laundering tools for Ethereum [ETH] thus far, has been sanctioned by the United States from August 2022, which has automatically blacklisted all Tornado-related funds for any regulated exchange.

Avraham Eisenberg, who put out a $116 million price manipulation operation against the DeFi platform Mango Markets in October 2022, was detained in the United States in December 2022. Such actions have also affected the morale of fraudsters.

Ari Redbord, TRM Labs’ head of legal and government affairs, said:

“The ability to trace and track stolen funds has just gotten better and better – not just by investigators using blockchain intelligence like TRM, but by sleuths on Twitter using open-source tools–and has created an environment where hacked funds are being tracked publicly in real time.”

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Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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