The cryptocurrency sector faced $74 million in losses due to hacks in January, signaling a 45% decrease from the previous year’s $133 million during the same period.
This update, provided by cybersecurity platform Immunefi on January 30, highlights the ongoing vulnerabilities in the industry despite the downward trend in financial damage.
Centralized Finance Takes Major Hit
Centralized finance (CeFi) platforms, which manage and custody users’ funds, bore the brunt of these attacks, accounting for 93% of the total losses.
Remarkably, this significant financial impact resulted from a single successful attack, illustrating the high stakes involved in security breaches within CeFi systems. The most notable breach occurred at the crypto exchange Phemex, where hackers made off with $69.1 million.
DeFi and Blockchain Vulnerabilities
In contrast, decentralized finance (DeFi) platforms experienced 19 separate incidents, contributing to only 6.5% of the total January losses. The BNB Chain was the most affected blockchain network, with 50% of the losses occurring there. Ethereum followed, accounting for 25% of the losses.
This distribution underscores the broader security challenges plaguing various blockchain networks, affecting both CeFi and DeFi ecosystems.
Industry-Wide Implications and Security Emphasis
Despite the drop in total losses from hacks, the crypto industry continues to face significant security threats. The recent incidents underline the critical need for enhanced security measures and robust systems to protect digital assets.
As the industry grows, ensuring the safety of these platforms remains a paramount concern, prompting both investors and operators to prioritize advancements in cybersecurity.