In 2024, the biggest target for cryptocurrency hackers will be centralized financial institutions (CeFi).
According to Dedi Ravid, co-founder and CEO of Web3 security firm Cyvers, more than 70% of funds lost in cryptocurrency hacks are stolen from CeFi institutions.
The CEO told Cointelegraph that CeFi entities account for around 70% of incidents, both in terms of lost funds and number of exploits.
“(CeFi) accounts for about 70% of the incident environment. However, attacks on smart contract-based projects are on the rise. The biggest security vulnerabilities today come from code and personal carelessness.”
According to a statement shared with Cointelegraph, Cyvers announced that it has partnered with Arthera Chain, a layer 1 blockchain, to strengthen Web3 security by providing real-time threat detection and comprehensive monitoring solutions.
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The cryptocurrency industry needs a more comprehensive security approach.
CeFi platforms, such as centralized cryptocurrency exchanges (CEXs), are increasingly becoming targets of hackers.
On July 18, hackers stole more than $230 million from Indian cryptocurrency exchange WazirX, the second-largest cryptocurrency hack so far in 2024.
According to Lavid of Cyvers, remediating these vulnerabilities requires the industry to take a more comprehensive approach to Web3 security.
“Addressing these vulnerabilities requires a shift to a more mature and conscious approach to security. Securing the entire network, not just individual projects, and focusing on both the technical and human elements is an essential step in this direction, especially as L2 networks continue to grow.”
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Will there be more hacks in 2024 than in 2023?
Cryptocurrency hackers are expected to make more money in 2024 than in 2023. Hackers stole $542.7 million worth of digital assets in the first quarter of 2024, a 42% increase over the same period in 2023.
While the hacker’s success will vary depending on each individual project, Lavid says integrating AI could further strengthen Web3 security.
“By incorporating AI and real-time monitoring, we aim to stay ahead of these threats. The shift towards protecting entire networks, not just individual projects, is critical. Especially with the proliferation of L2 networks, this approach improves our ability to protect assets and mitigate risks, making it increasingly difficult for hackers to succeed.”
Last year, smart contract security improved, which led hackers to start looking for easy targets, like private keys.
According to Merkle Science’s “2024 Crypto HackHub Report,” more than 55% of digital assets hacked in 2023 will be lost due to private key leaks, while smart contract vulnerabilities will drop 92% from a whopping $2.6 billion in 2022 to $179 million in 2023.
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