Crypto hackers will increase in 2024, but smart contracts are not responsible
Cryptocurrency hackers and exploits may be poised for a more successful year in 2024, surpassing their success in 2023.
In the first quarter of 2024, hackers stole $542.7 million worth of digital assets, a 42 percent increase compared to the same period in 2023.
The main reason for this is that hackers are constantly switching attack vectors and looking for easy targets, said Mriganka Patnaik, founder and CEO of crypto threat and intelligence platform Merck Science.
Patnaik to Cointelegraph:
“While smart contract vulnerabilities remain a concern, hackers are targeting areas outside of smart contracts, such as private key hashes. Often due to phishing attacks or unsafe storage practices, these liquids have resulted in significant losses.
Phishing attacks involve hackers aiming to steal sensitive information such as crypto wallet private keys. Other phishing attacks, known as address poisoning scams, aim to get investors to voluntarily send their funds to a fraudulent address that is already identical to theirs.
In May, a trader lost $71 million worth of crypto in the biggest phishing attack of the year. The attacker made the merchant send 99% of their funds to the attacker's address.
But surprisingly, an unknown thief returned $71 million to the victim a week later, an incident that caught the attention of blockchain investigative firms and the identity of the attacker was finally confirmed.
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Modern contracts are becoming more secure, but hackers are looking for easy targets
Smart contract vulnerabilities are among the infrastructure most targeted by hackers.
But according to Merkle Science's 2024 HackHub report, money lost due to smart contract vulnerabilities fell 92% to $179 million in 2023, down from $2.6 billion in 2022.
According to Patnaik, private key leaks are the biggest threat these days.
“While smart contract vulnerabilities remain a security threat, a significant portion of financial losses now come from attacks on vectors outside of smart contracts. The biggest security threat today is the increasing rate of loss due to private key breaches.
More than 55% of stolen digital assets will be lost to private key clues by 2023.
The reason behind the decline in smart contract exploits is more sophisticated security tools combined with hackers vying for easy targets, Patnaik said.
“New security tools are helping to identify and fix weaknesses in smart contracts before they can be exploited. Finally, hackers may look for easier targets that require less technical knowledge to exploit, such as stealing private keys.”
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Growing crypto values are attracting more hackers.
Cryptocurrency prices have appreciated significantly since the beginning of the year. According to CoinMarketCap data, the total market capitalization of all cryptocurrencies has grown by 54% year-to-date (YTD).
Besides increasing the potential bounty for exploiters, the growing value of cryptocurrency is attracting more hackers to the crypto space, Patnaik said.
“Rising crypto asset values make it an attractive target for hackers, as successful exploits can net more stolen funds than last year.”
More than $574 million worth of digital assets were lost by 30 individual crypto hackers in May 2024, representing a 666% month-over-month increase, according to a June 1 X post by PeckShield.
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