The Rise of Crypto Scams: A Year of Losses and Lessons Learned
In 2024, the crypto space witnessed a significant increase in losses due to scams, hacks, and exploits. According to cybersecurity firms, these incidents resulted in a total loss of approximately $2.2 billion, marking a 21% year-over-year increase.
Centralized Finance (CeFi) Sector Under Attack
The CeFi sector was hit particularly hard, experiencing a nearly 1,000% year-over-year increase in incidents. Institutional investors and traditional financial firms have started to rethink their stance on crypto this year, but many still see it as a risky play.
Notable Hacks and Exploits of the Year
- The Indian exchange WazirX was hacked in July, resulting in losses of $235 million.
- The Japanese exchange DMM lost $305 million in Bitcoin (BTC) due to a private key hack in May.
- South Korean NFT and game development platform PlayDapp suffered a private key leak in February, resulting in losses of around $290 million.
- Decentralized finance (DeFi) network Hedgey Finance was exploited for $44 million in April.
- Turkish exchange BtcTurk was hit by a wallet attack, resulting in losses of up to $55 million in June.
- Singaporean exchange BingX was hacked for $52 million in September.
Private Key Compromises: A Growing Concern
Chainalysis found that private key compromises accounted for the largest share of stolen crypto in 2024, at 43.8%. "We only have to look at the $305 million DMM Bitcoin hack, which is one of the largest crypto exploits to date, and may have occurred due to private key mismanagement or lack of adequate security," said Chainalysis.
AI-Driven Crypto Scams: A Growing Threat
Cybersecurity expert Jean Rausis warned that the increasing use of AI by cybercriminals means they can keep coming up with fresh types of phishing schemes and automated attacks. "This means both CeFi platforms and DeFi protocols will have to keep upping their game in 2025, and I wouldn’t be surprised if we keep seeing more and more sophisticated high-profile hacks over the coming years," he added.
Lessons Learned from 2024
Multifactor authentication is crucial for protecting crypto assets for both individuals and companies, and users must be extremely cautious of unsolicited communications and potential phishing attempts from entities impersonating exchange support personnel. Cold storage and self-custody have also been in the spotlight this year after MicroStrategy founder Michael Saylor sparked a debate about whether big banks should be custodying Bitcoin.
Emerging Threats: AI-Driven Attacks and Quantum Vulnerabilities
Cyvers’ co-founder and chief technology officer, Meir Dolev, and the firm’s senior blockchain scientist, Hakan Unal, emphasized the importance of adopting advanced security strategies, such as real-time threat detection, cross-chain monitoring, and preemptive prevention measures to mitigate these rising risks. "Emerging threats like AI-driven attacks and quantum vulnerabilities highlight the need for proactive measures and stronger regulatory oversight to protect digital assets," they added.
What’s Next?
Cyberspace will continue to evolve in 2025. These would include AI-powered threats such as sophisticated phishing, deepfake scams, and malware capable of evading detection. Other new attack vectors to expect include supply chain attacks, Internet of Things vulnerabilities, cloud and API exploitation, and quantum computing threats.
Quantum Computing: A Long-Term Risk
Although still emerging, quantum computing poses a long-term risk to current encryption standards, requiring a proactive shift toward quantum-safe protocols. On Dec. 9, search giant Google unveiled a new quantum computing chip called Willow that it claims can exponentially correct errors and process certain computations at a ‘mind-boggling’ pace.
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