Table of Contents
- Introduction
- The Grim Reality: September 2023 in Numbers
- How were Mixin, CoinEx, and Stake.com hacked in September 2023?
- How CoolWallet Stops Web3 Attacks Before They Happen
- The Culprits: Who’s Pulling the Strings?
- Year-on-Year Analysis: 2023 vs 2022
- Breaking Down the Types of September 2023’s Crypto Losses
- How does it Impact Crypto Stakeholders?
- Conclusion
Introduction
History has shown that the world of cryptocurrency consistently teems with groundbreaking opportunities but also perilous risks, and 2023 is no different so far. After the bad guys stole over $650 million in the first half of 2023, hopes were high that Q3 would be different, but hackers and scammers stayed right on track with their looting of DeFi protocols and centralized exchanges alike.
Beosin reports that over $889 million were cumulatively stolen in Q3 2023, while a new analysis by fellow blockchain security firm CertiK shows that September 2023 was a particularly devastating month for the crypto community, with a jaw-dropping $330 million pilfered by malicious actors led by North Korea’s sanctioned terrorist bogeyman hackers Lazarus Group.
Let’s dissect the key findings of the CertiK Q3 report, explore its ramifications for the crypto industry, and offer actionable insights to stay safe in Web3 by yourself and with the help of a resilient hardware wallet like CoolWallet Pro, which now also has real-time Web3 smart contract scanning abilities.
The Grim Reality: September 2023 in Numbers
According to the CertiK report, September 2023 has earned the dubious distinction of being the most financially destructive month of the year for crypto-related security breaches. A staggering $329.8 million was siphoned off, with the Mixin Network attack accounting for a lion’s share of $200 million. Other notable incidents involved the CoinEx exchange and Stake.com, which suffered losses of $53 million and $41 million, respectively. For those interested in safeguarding their digital assets, it’s crucial to rely on secure hardware wallets like CoolWallet Pro, which offers robust security features.
How were Mixin, CoinEx, and Stake.com hacked in September 2023?
1) Stake.com Hack (9/7/23)
On September 7, 2023, the online casino and sports betting platform Stake.com suffered a hack. The hackers were able to exploit a vulnerability in the platform’s smart contract to steal 10,000 Ethereum (ETH) from the platform. Stake.com claims that all user funds are safe and that the hack will have no impact on user funds. The platform has promised to reimburse users who were affected by the hack. Stake.com is a popular platform that allows users to bet on sports and play casino games using cryptocurrencies. The hack was a significant blow to the platform, but it is unclear how it will impact the platform’s future development.
2) CoinEx Hack (9/12/2023)
On September 12, 2023, hackers were able to steal $54 million worth of cryptocurrency from the CoinEx exchange. CoinEx immediately suspended deposit and withdrawal services for all crypto assets and shut down its hot wallet servers. The exchange has promised to reimburse users who were affected by the hack. CoinEx is a well-known cryptocurrency exchange that allows users to trade a variety of cryptocurrencies.
Mixin Network Hack (9/26/23)
On September 26, 2023, the Mixin Network was hacked. The details of the hack are not widely available, but it is known that the hackers were able to steal 1,000 Bitcoin (BTC) and 10,000 Ethereum (ETH) from the network. Mixin Network is a blockchain-based platform that allows developers to build decentralized applications (dApps) and operate them on the network. The platform is known for its fast transaction speeds and low fees.
How CoolWallet Stops Web3 Attacks Before They Happen
CoolWallet Pro is CoolBitX’s flagship Web3 hardware wallet recommended by crypto OGs like Litecoin founder Charlie Lee. Here’s why:
- It has an industry-leading EAL6+ secure element chip to protect your private key even from yourself.
- Its open-source code is fully transparent, unlike some competitors.
- Security boasts biometric 2+1 verification (phone, human, wallet).
- its encrypted Bluetooth communication is military-grade (AES-256).
- It’s also waterproof and tamper-proof.
- It fits in your actual wallet discreetly, which means you can use it wherever you want like a normal bank card
- Its feature-rich CoolWallet App enables you to trade, stake, and transfer your crypto assets anywhere and at any time in cold storage.
- CoolWallet App has a real-time SmartScan (see it in action below) to protect you against malicious or fake smart contracts and suspicious behavior when transacting.
The Culprits: Who’s Pulling the Strings?
The Lazarus Group, a hacking syndicate with alleged ties to North Korea, has been pinpointed as the mastermind behind the attacks on both CoinEx and Stake.com. Current data from Dune Analytics reveals that this nefarious group is sitting on a crypto stash worth approximately $45.6 million, however, the real number could be much higher as Lazarus was blamed a few years back for cryptocurrency theft of over $2 billion. A Certik blog post breaks down the hacking consortium’s modus operandi in way more technical detail here.
Year-on-Year Analysis: 2023 vs 2022
When we compare the cumulative losses for 2023, which stand at an eye-watering $1.34 billion, to those of 2022, a different pattern emerges. By March 2022, the crypto community had already lost $1 billion, primarily due to the Ronin Bridge exploit where North Korean hackers made off with around $624 million. In contrast, 2023 saw a more dispersed series of smaller incidents, taking until September to cross the $1 billion threshold. For an in-depth look at past incidents, you can refer to CoolWallet’s comprehensive guide on crypto hacks and scams.
Breaking Down the Types of September 2023’s Crypto Losses
The CertiK report doesn’t just focus on high-profile hacks; it also sheds light on other avenues through which crypto assets are being lost:
- $1.9 million vanished in exit scams
- $400,000 evaporated in flash loan attacks
- $25 million was swindled through phishing attacks
For those who are new to the crypto space, understanding these types of attacks is crucial. CoolWallet’s crypto wallet security tips offer valuable advice on how to protect your assets.
How does it Impact Crypto Stakeholders?
For Investors
The escalating frequency and complexity of these Web3 attacks serve as a stern warning for crypto investors. Adopting a diversified asset strategy and utilizing secure cold wallets like CoolWallet Pro can go a long way in risk mitigation. Knowledge is king, so stay up to date in 2023 with this guide on Web3 wallet safety.
For the Crypto Industry
All responsibility can of course not be dumped on investors alone. The blockchain industry will have to continue to ramp up its investment in security protocols and perhaps explore insurance options for investors down the line. Regulatory compliance can also contribute to a more secure environment if it’s done with the right considerations of users’ rights and freedoms. A good example is CoolWallet’s new SmartScan feature which helps Web3 users stay safe by flagging malicious smart contracts or fraudulent behavior before they execute a transaction.
For Regulatory Bodies
September’s stacked Web3 crypto crime numbers add another arrow in the quiver of regulators and law enforcement, particularly in the US, who are looking to tightly regulate digital assets (officially) due to their ability to facilitate money laundering and terrorism funding. The alarming rise in crypto-related criminal activities could expedite legislative measures aimed at safeguarding digital assets and bringing culprits to justice.
Conclusion
The CertiK report serves as a sobering reminder of the urgent need for fortified security measures within the crypto industry. While the underlying technology of cryptocurrencies opens up a world of possibilities, it also introduces novel risks that both individual investors and the industry as a whole must urgently address. For those serious about protecting their portfolio and looking to bolster their crypto security whilst using DeFi, CoolWallet’s guide on decentralized exchange security is an excellent resource.
If you’re in the market for a hardware wallet that delivers on all fronts, is jam-packed with trading and security features, and will never collect your personal data, then look no further than our CoolWallet Pro (for experienced users) and CoolWallet S (for beginners) models.
