Blockchain Security Firm Advises Caution Despite Fall in Crypto Hacks in Q1

Blockchain firm TRM Labs claims the downfall of crypto hacks is a “temporary reprieve.”

TRM Labs, a blockchain intelligence firm, has warned crypto enthusiasts that despite a substantial decrease in crypto-related hacks during the first quarter of 2023, they should stay vigilant.

As per a report released by TRM Labs on May 21st, the reprieve could be temporary rather than a lasting trend.

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The amount lost to crypto hacks in Q1 2023 was lower than any quarter in 2022. The report also highlights a remarkable decrease of nearly 65% in the average size of the hack compared to the same period in the previous year.

The average hack size also took a hit in Q1 2023 ­– to USD 10.5 million from nearly USD 30 million in the same quarter of 2022, even as the number of incidents was similar (around 40).

Despite this decrease, the report warns crypto users against a false sense of security. TRM Labs notes that the third quarter of 2022 saw a similar drop in crypto hacks, only for a historic spike in the fourth quarter, turning 2022 into a record-setting year for crypto hacks.

While no single factor explains the recent pause in activity, the firm suggested that the US Treasury’s sanctioning of cryptocurrency mixer Tornado Cash and the arrest and charges against Mango Market’s exploiter Avraham Eisenberg could have served as deterrents for potential hackers.

2022 was marked by a jaw-dropping crypto hack that drained crypto investors of billions. The primary targets of these attacks were decentralized finance (DeFi) protocols and entities connected to North Korea.

Although the downtrend in crypto-related hacks during Q1 2023 is indeed heartening, caution and proactive security measures should remain a top priority for every crypto user to ward off any potential resurgence of hacking attempts.