The Web3 ecosystem took a hit in Q3 2023, incurring losses around $890 million, as detailed in a recent publication.

The report indicated that these financial losses stemmed from malicious attacks including hacking, phishing tactics, and project collapses known as Rug Pulls, which highlight the increasing risks faced by Web3 initiatives. Beosin .

According to the company’s new Q3 2023 Global Web3 Security Within this grim tally, 43 cyberattacks contributed to about $540 million in losses. Additionally, phishing scams drained victims of around $66.15 million, while 81 Rug Pull incidents on several projects led to losses estimated at roughly $280 million.

Here’s a detailed overview of the losses experienced within the Web3 space during Q3 2023:

Hacker Attacks: A striking 43 cyberattacks resulted in an estimated loss of $540 million.

Phishing Scams: The sector was hit hard by phishing scams, which siphoned off about $66.15 million from victims.

Rug Pull Incidents: There were an alarming 81 instances of Rug Pulls across various projects, culminating in losses nearing $280 million.

Focus of Attacks: DeFi Under Siege

Data from the report showed that the decentralized finance (DeFi) sector was particularly hard hit, accounting for 29 of the attacks, amounting to 67.4% of the total incidents reported.

Among the different types of projects, public blockchains experienced the most significant financial losses, with Ethereum taking the hardest hit at a staggering $227 million, marking it as the hardest affected blockchain. Moreover, Ethereum recorded 16 separate security incidents.

Examining the reasons behind these breaches, it became evident that private key leaks were particularly detrimental, leading to losses totaling $223 million within that quarter. Alarmingly, around $360 million, which represents 67% of the stolen funds, remains with the hackers, highlighting the immense challenge of recovering lost assets.

Funds Flow to Hacker Addresses

Furthermore, a mere 10% of the stolen items were successfully retrieved in this timeframe.
A crucial aspect concerns the auditing status of the compromised projects. It’s noteworthy that the divide between audited and non-audited projects was almost equal, with 48.8% having undergone audits and 46.5% being unverified. This points to the reality that even ostensibly secure, audited projects can fall victim to the sophisticated strategies utilized by nefarious actors within the Web3 sphere.

Audit Status Remains a Concern

The eye-opening loss of $890 million due to security breaches starkly illustrates the hurdles this fast-evolving sector must overcome, with DeFi being a principal target and Ethereum bearing the brunt of the assaults. Additionally, the low recovery rates of stolen funds and constant threats to verified projects bring to light the critical necessity for enhanced security measures throughout the Web3 environment. The sector is now faced with the urgent task of bolstering its defenses against an ever-evolving landscape of cyber threats.

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