It’s been a bearish quarter for crypto hackers, a new report shows.
Blockchain intelligence firm TRM Labs revealed that the industry saw a dramatic decrease in the number of hacks in the first quarter of 2023 due to recovery efforts and sanctions placed on the Ethereum mixer Tornado Cash.
The report states that hackers stole approximately $400 million from crypto projects in 40 attacks, which represents a 70% decrease in the amount of money stolen compared to the same period in 2022.
While the number of hacking incidents remained steady quarter-over-quarter, the average size of each hack fell from $30 million to $10.5 million.
In addition, the amount stolen through hacks in Q1 2023 was less than in any quarter of 2022.
The report attributed the industry’s positive trend to legal actions against hackers and sanctions last year on Tornado Cash making it “difficult to launder proceeds.”
Mango Markets has captured a turning point, says TRM Labs
Regulators cracking down on attackers may also have played a role in the decline in hacks last quarter.
In December 2022, the US Department of Justice arrested Avraham Eisenberg, charging him with market manipulation in connection with his $114 million in Solana’s decentralized perpetual exchange, Mango Markets, although he returned $67 million of the stolen amount .
Analysts from TRM Labs added that “Avraham’s prosecution may signal to attackers that even an agreement from the victim not to pursue legal action may not provide protection.”
Another factor influencing the low amount of hacking in Q1 2023 is the increase in attackers returning their funds obtained.
In April 2023, for example, Euler Finance successfully returned the funds from its $200 million hack. Similarly, a Tender.fi exploiter, who stole $1.5 million, settled the team’s $850,000 bug bounty.
The report also cited enforcement of “anti-money laundering standards” by exchanges, legal action against “bad actors,” and sophisticated “blockchain intelligence tools” as reasons for the decline. of attacks.
However, analysts estimate that crypto hacks are likely to “rebound” as the year progresses. This is due to the fact that just a few big hacks can easily skew the numbers. TRM analysts found that ten hacks accounted for 75% of the total amount hacked in 2022.
Therefore, individual quarters offer “poor predictions” of annual projections, the report reads.