In response to the growing threat of cryptocurrency hacks, a team of ethical hackers has created an elite “SEAL” team to strengthen defenses and prevent breaches worse than those in 2023.
The anti-hack response team, SEAL (Security Alliance), led by white hat hacker and Paradigm researcher Samczsun, has received over 900 hack-related tickets since their launch in Aug. 2023.
To make protocols more resilient to cyberattacks, the initiative will create a battleground for white hat hackers and emerging protocols, announced samczsun, during his keynote at the Web3 Summit in Berlin:
“We envision a future where we host live adversarial environment for protocols and researchers to stress test their protocols. This way, the teams can pass through protocol and make sure that it functions under high-intensity situations. But also, researchers can test their skills in being a black hat or a white hat.”
The initiative’s first event, Battle.net, will be hosted at the DeFi Security Summit at Devcon between Nov. 7 and 9.
The white hat initiative 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.
samczsun keynote speech. Source: Web3 Summit Berlin
Related: Bitcoin poised for breakout as US money market funds reach $6.2T
Safe harbor agreement to protect white hat hackers
White hats, or ethical hackers, could be committing crimes by aiming to rescue stolen funds.
This is because numerous global laws are prohibiting people from accessing computer systems without authorization, which would make rescuing stolen smart contract funds illegal.
To protect white hat hackers from unjust legal consequences, SEAL published the Whitehat Safe Harbor Agreement, a legal framework providing financial assistance to white hats facing legal action, explained samczsun:
“We also prepared some defenses for the white hat by partnering with the Security Researcher Legal Defense Fund. The SDF is another nonprofit whose mission is to provide grants to security researchers interfacing with legal issues.”
SEAL Whitehat Safe Harbor Agreement. Source: Security Alliance
Related: Top 100 DeFi Hacks: Offchain attack vectors account for 57% of losses
Crypto hacks in 2024 likely to exceed those of 2023
The anti-hack initiative comes during a crucial time when crypto hackers are threatening to surpass the previous year’s achievements.
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.
Hackers could surpass the previous year if the current pace of exploits continues, according to Mar Guimenez-Aguilar, the lead security architect at Halborn cybersecurity firm.
The cybersecurity expert told Cointelegraph:
“Considering the number and severity of attacks in 2024 so far, there have been approximately 14 incidents among the top 100 hacks, averaging nearly two attacks per month. If this trend continues, the total could reach about 24 attacks by year-end, slightly surpassing the total for 2023.”
Nearly 80% of cryptocurrencies never recover in pricing after a hack or exploit, according to a report by onchain security firm Immunefi. This devaluation often causes more damage to projects than the exploit itself.