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Vigilance Urged as Crypto Theft Decreases in Q1 2023

Mon, 22 May 2023, 16:02 pm UTC

Stakeholders are being advised to remain vigilant, despite a noticeable decrease in crypto-related thefts during the first quarter of 2023. However, caution is being exercised, warning that this respite may be temporary rather than the beginning of a sustained downtrend.

A review conducted earlier this year by Chainalysis revealed an unprecedented surge in cryptocurrency theft in 2022, with an estimated loss reaching a staggering $3.8 billion. Decentralized finance (DeFi) platforms and entities faced cyberattacks reportedly linked to North Korea, making them the primary victims.

In contrast, the first three months of 2023 witnessed a significant reduction in such illicit activities. TRM Labs, in their report published on May 21, noted that the value lost to crypto thefts in Q1 2023 was lower than any quarter in the previous year. Notably, the average value of individual hacks also decreased by nearly 65% compared to the same period in the previous year.

However, TRM Labs emphasized the need for caution based on lessons from the past. In Q3 2022, there was a decline in crypto hacking incidents, followed by an explosion of such incidents in Q4, making 2022 a year of record-breaking crypto heists.

"Regrettably, the recent decline in crypto crimes is more likely to be a temporary pause rather than a steady trend," warned TRM Labs. They added that it would only take a few large-scale attacks to tilt the balance towards an increase in criminal activity once again.

While the exact reasons behind this temporary lull are not clear, TRM Labs suggests that several deterrent factors may have played a role. The US Treasury's decision to impose sanctions on cryptocurrency mixer Tornado Cash and the apprehension and indictment of Avraham Eisenberg, who is accused of exploiting Mango Markets, may have deterred potential hackers.

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