Rug Pulls Account For Majority of Scams as Q3 2023 Exploits Wipe Out $720 Million
The impact of digital asset scams has been a major talking point around policies, regulations, and developer’s direction this year with millions lost across chains to bad actors.
A new report by blockchain security firm Hacken shows a quarter-to-quarter increase in hacks and money drained from crypto firms amid wider calls for tougher regulations.
A total of 117 hacks was reported in the last three months with $720 million stolen in the entire industry compared to Q2 2023 131 hacks and $327 million stolen values.
A significant share of losses can be hinged on access control (65%) which analyst at Hacken believes displays the human factor as a major challenge as well as coding errors.
“In Q3, the crypto landscape witnessed diverse security breaches. The lion’s share of the losses, with a significant 65%, came from Access Control attacks. Smaller yet noteworthy segments – Rug pull and Reentracny + Flash Loans made up over 20%.”
Access control accounted for $449 million in losses from about eight incidents.
The biggest hack in the last three months was the Multichain bridge which saw $231 million after its previous two incidents attracting wider concerns within the community.
The infamous Viper Compiler incident caused by a bug led to approximately $70 million in losses from multiple projects before 90% of stolen funds were recovered.
Rug pulls account for most scam incidents because of the nature and ease of creation. Rug pulls are a type of exiting scam perpetuated by the team on most occasions rather than an external hacker.
The developers of a scam coin build traction and suddenly withdraw liquidity after the price pump, a scheme described by analysts as easy to spot and prevent.
One way of preventing scams like rug pulls
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