Unveiling the $32.2 Million Crypto Loss
October 2023 witnessed a significant blow to the crypto industry as scams and security incidents led to a hefty loss of over $32.2 million, according to the blockchain analysis firm CertiK. The incidents ranged from vulnerability exploits to elaborate exit scams and flash loan manipulations.
The Pinnacle of Vulnerability Exploits
Accounting for a whopping $22 million of the total losses, vulnerability exploits topped the list of cybersecurity woes. The Fantom Foundation security breach was at the forefront, with hackers making away with $700,000, primarily from an employee wallet. Following the theft, the stolen funds found their way into Tornado Cash, a privacy-focused Ethereum mixing service.
Exit Scams: A Recurring Nightmare
Exit scams and rug pulls continued to haunt the crypto space, summing up to $8 million in losses for October. The most notorious of these was the Standard Cross Finance scam. Initially posing as a gaming project, the scammers hired actors to play the roles of developers and executives, eventually swindling $1.6 million from investors. Notably, the miscreants behind this scam were also implicated in the earlier Fontoch scam, which made away with $31.6 million from its victims.
Flash Loan Manipulations: Quick Hits, Big Losses
Flash loan scams, though lesser in value compared to other scams, made a significant impact with $1.7 million in losses. The essence of these scams lies in the exploitation of flash loans’ features, where borrowing and repayment occur within a single transaction. Malicious actors manipulate asset prices or exploit smart contract vulnerabilities, leaving platforms or users in financial disarray. The most significant of these scams was the $2.2 million loss in Platypus DeFi, although, in a rare turn of events, over 80% of the funds were later recovered.