Lesser crypto hacks in Q1 a ‘temporary reprieve’

As per a May 21 report by TRM Labs, the amount stolen via crypto hacks in the first quarter of 2023 was less than any other quarter during the last year

The crypto community is being urged not to let their guard down in spite of a considerable reduction in crypto hacks in Q1 of this year — with one company cautioning it is most probably a temporary respite, rather than a long-term trend.

Last year was the biggest year ever for crypto hacking, with an estimated $3.8bln stolen, mainly from decentralized finance (DeFi) protocols and North Korea-linked attackers, as per a report from Chainalysis earlier in 2023.

Though, this number seems to have acutely lessened during Q1 of 2023. As per a May 21 report by TRM Labs, the amount stolen via crypto hacks in the first quarter of 2023 was less than any other quarter during the last year.

It was also noted that the average hack size declined around 65 per cent compared to the prior year period.

The average hack size also took a hit in the first quarter of this year – to $10.5mln from around $30mln in the same quarter of 2022, even as the number of incidents was similar (nearly 40).

In spite of the decline, history indicates crypto users should not get complacent. Crypto hacks dropped considerably in the third quarter of last year, just prior to a record-setting number of hacks in the fourth quarter, which turned 2022 into a record year, stated TRM Labs.

Unfortunately, this decrease is most probably a temporary respite rather than a long-term trend, TRM Labs noted, saying that just a few large-scale attacks could be sufficient to tip the scales once more.

While it was noted that there is no one clear clarification for the lull, TRM Labs proposed the sanctioning of cryptocurrency mixer Tornado Cash by the U.S. Treasury and the charges against Mango Markets exploiter Avraham Eisenberg may have discouraged potential hackers.