Crypto Hackers Double Down in February, Stealing 97.6% More Value Than Previous Month

ByTim Russert

Mar 3, 2024

The cryptocurrency sector faced a significant security challenge in February 2024, with a stark increase in the frequency and scale of hacking incidents. PeckShield, a leading blockchain security and investigation firm, reported a dramatic 97.6% month-on-month rise in the total value of cryptocurrencies stolen due to these security breaches. This surge underscores a growing concern within the crypto community, as both high-profile individuals and major projects have become targets for hackers and scammers, marking a tumultuous start to the year for digital asset security.

Major Heists Skew Monthly Theft Totals

In a revealing update shared on platform X, blockchain investigator PeckShield disclosed a significant rise in the total value of funds stolen from the cryptocurrency community in February, with hackers making off with approximately $360.83 million. This figure represents a 96.7% increase from January, where the thefts amounted to $182.54 million, according to PeckShield’s prior analysis.

Despite the stark increase in the value stolen, February saw a decrease in the number of individual attacks, with 21 hacks reported, marking a 30% drop compared to the 30 incidents recorded in January. Notably, the theft from Ripple co-founder Chris Larsen’s addresses on the last day of January accounted for a substantial 70% of that month’s total stolen value. Similarly, a significant portion of February’s losses can be attributed to a single incident, the PlayDapp hack, which alone constituted about 71% of the month’s total stolen funds. This trend underscores the impact that major heists can have on overall statistics, highlighting the need for heightened security measures within the crypto ecosystem.

Recovery Efforts Fall Short as Major Heists Dominate

PeckShield’s report highlights a sobering reality in the aftermath of February’s crypto heists: a mere 1.8% of the stolen funds have been successfully retrieved. Out of the staggering $360 million stolen, only $6.7 million has been recovered. The bulk of these recovered funds came from a successful negotiation with the hacker responsible for the Seneca attack, resulting in the return of $5.3 million. This low recovery rate underscores the challenges in reclaiming assets once they have been illicitly siphoned off, emphasizing the importance of proactive security measures in the cryptocurrency space.

Top Attacks Of The Month

The past month’s most significant losses stemmed from attacks on high-profile targets within the crypto community. The most substantial financial impact was felt by the web3 gaming platform PlayDapp, which lost 200 million PLA tokens in an initial heist. A subsequent attack led to the further loss of 1.4 billion tokens, culminating in a total loss of $290 million. The severity of the situation forced PlayDapp to transition to a new token in an effort to safeguard its user base.

Following PlayDapp, the decentralized finance (DeFi) platform FixedFloat faced a considerable setback with the theft of almost $26 million worth of Bitcoin (BTC) and Ether (ETH). These incidents highlight the significant risks faced by projects and individuals in the crypto sector, stressing the continuous need for enhanced security protocols and vigilant monitoring to mitigate the impact of such malicious activities.

Sophisticated Tactics Complicate Fund Recovery

The efforts to trace and recover the stolen cryptocurrency have been significantly complicated by the hackers’ sophisticated methods of dispersing the funds. In the case of the stolen Bitcoin, the culprits divided the assets among multiple addresses, effectively obscuring the trail. Similarly, the stolen Ether (ETH) was transferred to externally owned accounts and further concealed using the centralized mixer eXch, hindering the tracing process and complicating recovery efforts.

High-Profile Individual Targeted

Among the notable victims of February’s cyber-attacks, Jeff ‘Jihoz’ Zirlin, co-founder of Axie Infinity, experienced the third-largest financial hit, with over $9.7 million in Ether stolen from two of his addresses. The breach, attributed to “leaked keys,” allowed the attacker to withdraw 3,248 ETH, which were then laundered through the use of “tornado cashing,” a method used to obscure the origin and destination of funds.

The thefts recorded in the initial months of 2024 paint a concerning picture of the security landscape within the cryptocurrency market. According to a previous report by PeckShield, the total value of stolen crypto funds in 2023 amounted to approximately $342 million, marking a 25% decrease from the previous year. However, the total value of funds stolen through high-profile hacks in just the first two months of 2024 has already exceeded the entirety of 2023’s losses, signaling an alarming rate of increase in crypto-related thefts.

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