CertiK’s latest report has revealed that the crypto hacking losses in 2023 have dropped by 51% compared to the previous year. The total losses amounted to $1.84 billion across 751 events, with an average loss of $2.45 million per incident. The top ten incidents contributed $1.11 billion to the total. Surprisingly, the median loss per incident was found to be a mere $101,132.
November recorded the highest amount lost at $363,367,327 from 45 incidents, while the third quarter of the year dominated with $686,558,472 losses from 183 hacking, scamming, and exploit incidents.
Private key compromises accounted for nearly 50% of the total losses, reaching $880 million. Despite comprising only 6.3% of the total security incidents, private key compromises contributed to over half of the losses. Notably, six of the ten most costly incidents in 2023 were a result of private key compromises.
One significant incident occurred in July, where the compromise of Multichain led to a loss of $125 million. It was discovered that Multichain’s CEO had exclusive control over the multi-party computation servers and private keys, despite promoting decentralization. The CEO’s arrest rendered $1.5 billion in Total Value Locked on the Multichain bridge inaccessible to users.
To prevent such incidents, CertiK has recommended implementing various private key management practices, including employing multi-signature wallets, using hardware wallets for secure key storage, and storing private key backups offline in secure locations.
Additionally, CertiK highlighted that Ethereum experienced the highest losses among blockchains, totaling $686 million across 224 incidents. In contrast, BNB Chain reported significantly lower losses at $134 million, despite encountering 387 security incidents. The report also emphasized the need for improved cross-chain interoperability to address security breaches impacting multiple blockchains, which resulted in losses of $799 million.