The majority of hacked cryptocurrencies are unable to recover from the exploit in terms of pricing, according to the latest onchain security report.
Over 77.8% of hacked cryptocurrencies suffered sustained negative price impact six months after the hack.
Moreover, 51.1% of hacked tokens saw over 50% price declines six months after the protocol was hacked, according to an Immunefi report shared with Cointelegraph.
However, hacked protocols sustain most of the damage after the hack, according to Mitchell Amador, the founder and CEO of Immunefi. He told Cointelegraph:
“The millions lost to the hack immediately anticipate even larger losses, caused by market impact and dependency impact, alongside many months of lost time spent rebuilding your emotionally shattered team and operations.”
Media token price declines after hack. Source: Immunefi
The report comes nearly a month after a hacker stole over $230 million from WazirX, an Indian cryptocurrency exchange, in the second-largest cryptocurrency hack of 2024 so far.
Related: Top 100 DeFi Hacks: Offchain attack vectors account for 57% of losses
CeFi remains the biggest vulnerability for hackers
Decentralized finance (DeFi) applications used to account for most of the digital asset exploits in the past.
However, centralized finance (CeFi) infrastructure has become the biggest vulnerability for the crypto space, accounting for most of the losses in 2024, according to Amador, who said:
“Infrastructure compromises tend to be the most devastating hacks in the cryptocurrency world. For example, a leaked private key will lead to the theft of all funds controlled by it.”
From the $1.19 billion worth of digital assets stolen to date in 2024, $636 million is attributed to CeFi vulnerabilities.
Median token price declines six months after hack. Source: Immunefi
Hackers are increasingly targeting CeFi infrastructure like crypto exchanges due to the large amount of funds that could potentially result in hundreds of millions in stolen bounty, explained Amador.
Immunefi is a prominent onchain crowdsourced cybersecurity platform, safeguarding over $190 billion in user funds.
Related: Polychain leads $6.7M investment in new Bitcoin-centric yield network Corn
Established crypto projects suffer less damage post-hack
Some cryptocurrencies fare better after an exploit.
Token price declines, major exploits. Source: Immunefi
Tokens with a more established team that belong to larger projects historically are more resilient to exploits, according to Amador:
“Recovered tokens include projects like BNB Chain, SushiSwap, THORChain, Olympus, and Optimism. All of these projects are either huge ecosystems themselves, such as BNB Chain or Optimism, or are longstanding protocols like SushiSwap, which have a dedicated community.”
This is mainly due to larger ecosystems behind these tokens that exert more buying power after a black swan event, explained Amador.
Crypto hacks remain among the biggest hurdles of mass cryptocurrency adoption since the amount of stolen funds in 2024 could surpass the previous year.
By Feb. 29, over $200 million had been lost to hacks year-to-date, reflecting a more than 15% increase compared to the same period in 2023, when $173 million worth of digital assets were stolen.
Magazine: Criminal at Bitcoin 2024, BTC Strategic Reserve Bill, and more: Hodler’s Digest, July 28–Aug. 3