By Gabriel Joyce
Blockchain security firm CertiK, has revealed that the cryptocurrency sector incurred substantial losses amounting to $42.6 million in May due to a series of exploits, flash loans, and exit scams, highlighting ongoing security challenges within the industry.
Despite these losses, efforts to mitigate the damage proved somewhat effective, with approximately $96.2 million successfully recovered during the same period.
Diverse Attacks Plague the Crypto Industry
In May, the cryptocurrency sector faced significant security challenges, predominantly from flash loan attacks, which accounted for the highest financial toll. According to CertiK, these attacks led to losses of approximately $20.7 million, with Sonne Finance experiencing the brunt of it, losing $20 million.
Other affected entities included TLN Protocol, which lost $746,000, while smaller losses were seen by GPU and Saturn Token, totaling $32,394 and $8,343 respectively.
Exploits were also a major cause of financial damage, contributing around $19.7 million to the total losses. Gala Games endured the most severe of these, with losses amounting to $21.6 million.
Other significant losses from exploits included AlexLab at $4.3 million, Pump Fun at $1.9 million, GNUS.ai at $1.28 million, and Orion at $947,000.
Exit scams, though less frequent, still posed substantial risks, causing losses of about $1.8 million in total. Among these, Trees On Sol was the hardest hit, losing $1.11 million, followed by Pii Park with $490,000, Novamind at $123,019, and Arbalest at $91,520.
The pattern of losses has shown a peculiar trend, with flash loan attacks causing greater damage in odd-numbered months of the year—January, March, and May recorded losses of $15.3 million, $21.9 million, and $20.7 million respectively, while the even months of February and April saw considerably lesser losses.
Despite these ongoing challenges, February marked a peak in losses due to exit scams, totaling a staggering $58.3 million, starkly contrasting with the less significant figures seen in other months. This illustrates the persistent and evolving threats within the crypto landscape, necessitating advanced and vigilant security measures.
Ongoing Vulnerabilities in the Crypto Ecosystem
The cryptocurrency sector continues to grapple with security breaches, with over $473 million lost to hacks and rug pulls in 108 separate incidents since the beginning of 2024, as reported by security service provider Immunefi.
This alarming figure underscores the persistent vulnerability of the DeFi (Decentralized Finance) market, which remains the prime target for such attacks. Interestingly, centralized finance companies have steered clear of any such incidents this year, a notable shift from the past.
Despite a significant reduction in losses from the previous year—where over $2 billion was siphoned off due to hacks and exploits—the frequency and impact of these security breaches remain a critical concern. In May 2024 alone, the Ethereum and BNB Chain experienced the brunt of these attacks, accounting for 62% of the total losses across all targeted chains.
Highlighting the severity of the issue, a recent hack at DMM Bitcoin, a Japanese cryptocurrency exchange, resulted in the loss of approximately 48 billion yen ($305 million) worth of Bitcoin.
The exchange disclosed that 4,502.9 BTC had inadvertently “leaked” from their systems. This incident not only reinforces the ongoing challenges faced by the crypto industry but also accentuates the need for enhanced security measures to safeguard assets against such devastating exploits.
