Web3 ecosystem lost $3.9 billion to crypto fraud in 2022

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New technologies create new risks. Ever since the cryptocurrency rose to prominence after the release of Bitcoin in 2008, cybercriminals have looked for ways to separate users from their hard-earned money. Now that the Web3 ecosystem is growing, fraud is becoming an even bigger threat.

Today, Web3 bug bounty provider Immunefi released a new study calculating that $3,948,856,037 worth of crypto funds were lost in the Web3 ecosystem to hacks and scams in 2022. The report also revealed that the two most targeted blockchains last year were BNB Chain and Ethereum, with 65 and 49 unique security incidents each.

The good news is that while crypto fraud in the space remains common, overall losses have decreased by 51.2% from the 2021 total of $8,088,338,239.

In any case, this latest study highlights that organizations interacting with the Web3 ecosystem must implement a highly developed security strategy to deal with these new threats, or else they risk leaving their data exposed.

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The report comes as researchers predict the Web3 market will grow from $3.2 billion in 2021 to $81.5 billion in 2030, with a compound annual growth rate of 43.7%.

Inevitably, as the value of this market increases, more and more cybercriminals will innovate new scams and threats in an attempt to capitalize on its popularity and steal user funds. This raises new challenges, as the nature of these attacks in digital spaces will be different from those encountered in the traditional Web2 sphere.

"Web3 is still a whole new world, full of unknown paths," said Mitchell Amador, Founder and CEO of Immunefi. “This novelty, by definition, brings a level of inexperience and danger to the game. Additionally, due to the very nature of the Web3 ecosystem, where smart contract code holds huge amounts of capital, the environment is much more adversarial than traditional Web2 applications.

Users who are just beginning to adapt and experiment with Web3 solutions are also vulnerable to emerging scams.

"In Web3, users are still adapting to the technology and many barely know how to properly use wallets and sign for transactions," Amador said. "With all the new projects and technologies coming out every week, it's no surprise that bad actors are able to exploit the inexperience and naivety of new users."

As a result, Amador recommends that CISOs and security managers who interact with these technologies invest in security training, not only on phishing threats, but also on the use of infrastructure such as wallets, private keys and common DeFi applications.

Forward, leaders and researchers...