The global cryptocurrency market lost at least $670 million in the April-June quarter (Q2), and 97 per cent of the losses were due to hacks and scams, a report said on Thursday. The crypto losses in the second quarter were up 52 per cent from $440 million in the same period last year.
“The majority of these funds was lost by four specific projects, Beanstalk known as a decentralized stablecoin protocol, the Harmony Horizon Bridge, Mirror Protocol, and Fei Protocol,” according to data from Immunefi, Web3’s leading bug bounty platform.
“In Q2 2022, most of the losses 96.92 per cent happened as a result of hacks. It is also notable that blackhat hackers are now primarily targeting and exploiting DeFi (decentralised finance), 49 out of 50 instances involved DeFi protocols,” the report noted.
The teams at Immunefi protect over $100 billion in users’ funds. “We have reviewed all instances where blackhat hackers have exploited various crypto protocols, as well as cases of alleged fraudulent protocols and founders who have performed a rug pull in Q2 2022,” said the company.
They located 50 such instances, including both successful and semi-successful hacking attempts, as well as fraud events, in Q2. The most common type of crypto fraud are investment scams and since 2021, the US Federal Trade Commission (FTC) has received complaints of losses totaling $575 million due to this kind of fraud.
People lost crypto worth over $185 million in the US via romance scams in the first quarter this year, as fraudsters use new means to rob their victims, with romance scams featuring prominently. Nearly 46,000 Americans reported losing over $1 billion in crypto to scams since early 2021, according to a recent FTC report.