May Sees $54M in Crypto Scams and Rugpulls: De.Fi Report

In the Brief:

  • May 2023 saw scams and hacking incidents resulting in $54M in losses, with BNB Chain being the most affected.
  • Rug pulls were the most prevalent, with governance tokens and stablecoins being the most targeted.
  • Flash loan attacks caused significant losses.
  • No losses were reported for yield aggregators, gaming, metaverse applications, NFTs, and centralized crypto platforms.

2 - 4 minute read

In May 2023, the cryptocurrency market experienced a tumultuous period marred by scams and hacking incidents. According to a report by security firm De.Fi, the cumulative losses from these incidents amounted to over $54 million. This amount, while significant, is nearly half of April’s $101.5 million loss, suggesting that users and developers are implementing better security practices.

The BNB Chain ecosystem was the hardest hit, accounting for losses above $37 million across ten cases. In contrast, Ethereum-based projects saw the least exploits, with losses just over $2 million. Among the top ten cases, Fintoch suffered the highest loss of $31.7 million due to a smart contract exploit. Jimbo Protocol on Arbitrum experienced a loss of $7.5 million due to a rugpull, while Deus Finance on BNB lost $6.2 million in a smart contract exploit.

Rug pulls remained the most prevalent type of scam, accounting for twelve cases and losses totaling $37 million. Exploits resulted in nine cases of losses totaling $8.8 million, while flash loan attacks led to significant losses totaling $8.9 million, despite being less frequent with just five cases. Exit scams were responsible for two cases, resulting in a loss of $177,000.

The report also highlighted that governance tokens were the most commonly targeted category, with 19 cases reported and losses totaling $3.3 million. Decentralized exchanges (DEX) were targeted in three cases, resulting in losses of $4 million. Stablecoins recorded the highest amount lost, reaching $6.2 million in a single case.

It is worth noting that other categories, such as yield aggregators, gaming and metaverse applications, non-fungible tokens (NFTs), and centralized crypto platforms, did not report any losses during this period. Borrowing and lending protocols remained unaffected as well.

In the context of the cryptocurrency market, these incidents are concerning as they affect the trust that traders and investors have in the market. The report serves as a reminder that security practices must continue to improve to prevent such incidents from happening in the future.

The Bottom Line

Traders should remain vigilant and cautious when investing in cryptocurrencies, especially those in the BNB Chain ecosystem. They should also pay attention to the security practices of the projects they invest in and be wary of rug pulls and flash loan attacks. While the incidents in May 2023 did not have a significant impact on the market, they highlight the importance of security and risk management in the cryptocurrency market.

Disclaimer: The content in this article is provided for informational purposes only and should not be considered as financial or trading advice. We are not financial advisors, and trading carries high risk. Always consult a professional financial advisor before making any investment decisions.

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