DeFi Platform Hedgy Finance Falls Victim to $44 Million Crypto Hack
Around $500 million of digital assets were lost on account of hack attacks launched in 2024. A new Cointelegraph article noticed that the total losses were noticed as a result of all the cybersecurity incidents on DeFi projects during Q1 2024.
One such affected DeFi protocol was Hedgey which was hacked leading to stolen reserves valued at $1.9 million on the Ethereum network as per Cyvers data alerts.
Hedgey protocol confirmed the exploit and noted that it is actively working with auditors to decipher the vulnerability of the potential attack. It mentioned in a 19th April post, the firm noticed that it was investigating the attack on the Hedgey Token Claim Contract.
The users who have active claims were directed to cancel them before the End Token Claim button. After the DeFi protocol confirmed the exploit, scam accounts impersonating the protocol started posting spiked links under the social media post.
These scammers were asking people for a refund or revoking their smart contracts and directing users to spiked links with no connection to Hedgey protocol. The exploit took place only a few hours before the halving block height.
During Q1 2024, a total of 223 hacks and exploits led to a loss of $502 million in digital assets as per Hack3d report issued by CertiK. The report postulated that around 54% of increase compared to Q1 2023 was subjected to a total of $326 million in stolen funds.
Cybersecurity Report Hacks
The cybersecurity report noticed that January 2024 remained the most lucrative month for hackers who managed to siphon around $193 million in crypto in 78 unique on-chain incidents.
For the previous quarters, investors lost a considerable amount of funds owing to loss of private keys with $239 million lost in 26 separate incidents.
Meanwhile, compromised private keys affected only 11.7% of the overall cybersecurity events as per CertiK. However, the good news is that more than $78 million of stolen funds were finally recovered in Q1 which was attributed to the efforts and dedication to recover funds for the Munchables protocol.
At the same time, around $1.8 billion was lost to various crypto hacks and scammers who were operational in 2023.
Out of the total hack attempts only 17% were attributed to North Korean Lazarus Group as per a 28 December report prepared by ImmuneFi. Another Cointelegraph report noticed that institutional investors have potential to invest in DeFi but remain at bay on account of on-chain risks. The statement was issued by Fireblocks CEO Shahar Madar.
Companies to Refrain from Investing in DeFi on Account of On-Chain Risks
The report noticed that institutional investors have continued to stay on bay on account of risks associated with on-chain DeFi transactions. The firm is working on addressing these issues by introducing new features to their platform.
The executive noticed that the risks of investing in DeFi are significant. Speaking with the journalists she retained that institutional investors have bigger responsibilities in comparison to the average consumer trades.
The risks of the unknown and unpredictable DeFi framework are something that institutions have to account for in their risk management strategies. The executive denoted that it was the major factor that was holding back institutional investors from investing in DeFi projects. Regardless of the risks, DeFi trading volume increased by 75% during the first quarter of 2024 reaching around $4.5 billion.
Rise of DeFi Hack Attacks
The DeFi sector has around $95 billion in total staked funds as per DeFiLalama. The executive noted that a lot of intricate attackers are looking to breach and steal funds from the sector. About $336.3 million of cryptocurrencies were stolen by hackers and scammers in the first quarter of 2024 with a peg down from $437.5 million in siphoned funds in the first quarter of last year.
Fireblocks introduced two new tools for institutional DeFi suite that are noticed as transaction simulation allowing users to examine how smart contracts impact wallets before private key generation. At the same time, the project allows users to incorporate DApp protection against malicious elements and generate alerts for suspicious activities.
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