A recent report from Web3 security firm Cyvers, shared via Nairametrics, revealed that pig butchering scams have become the most prominent threat to cryptocurrency users in 2024. These scams resulted in a staggering $3.6 billion in losses, primarily affecting Ethereum blockchain users.
Rise in Cyber Threats
The report noted a 40% increase in cyber threats compared to 2023, with 165 incidents causing $2.3 billion in damages. Although these figures mark a decline from the $3.96 billion lost in 2023, the persistent nature of these schemes underscores vulnerabilities within the crypto ecosystem.
Common Attack Methods
- Access Control Breaches: Responsible for $1.9 billion in losses across 67 incidents.
- Smart Contract Exploits: Resulted in $456.8 million in damages.
- Address Poisoning: Caused $68.7 million in losses.
Anatomy of Pig Butchering Scams
Pig butchering scams rely on long-term manipulation. Scammers initiate contact through unsolicited messages and gain victims’ trust over time. Once trust is established, victims are lured into transferring substantial funds to fake investment platforms.
Ethereum emerged as the most targeted blockchain in 2024, with over 150,000 addresses and 800,000 transactions involved. Cyvers attributes this vulnerability to Ethereum’s open and accessible nature, which allows scammers to execute small, seemingly harmless payments before executing larger thefts.
Proposed Solutions to Mitigate Risks
Cyvers CEO Deddy Lavid emphasized the need for user education on access control breaches and improved transparency among exchanges. The report also highlighted that most scams involved Tether (USDT), with funds laundered through both centralized and decentralized exchanges, such as Binance, HTX, OKX, and Coinbase.
Significant Incidents in 2024
Several major breaches further exemplified the scale of crypto thefts this year:
- DMM Bitcoin: A $305 million hack caused by a compromised private key.
- WazirX: Lost $235 million due to a multi-signature wallet vulnerability.
- Radiant Capital: Faced a $50 million loss from compromised employee devices.
- BingX: Suffered a $52 million loss due to hot wallet exploits.
Recovery Efforts Show Promise
Despite the losses, recovery initiatives have been somewhat effective. On-chain investigators, such as ZachXBT, helped recover $1.3 billion in stolen funds in 2024. Notably, ZachXBT uncovered a scheme involving $500K stolen through X account phishing scams.
Bug bounty programs also contributed significantly, rewarding ethical hackers for identifying vulnerabilities. Quarterly trends showed that Q3 experienced the highest losses at $760 million, while Q4 saw reduced activity and financial damage.
Conclusion
Pig butchering scams have exposed critical vulnerabilities in the cryptocurrency industry, with Ethereum users facing the brunt of these attacks. While recovery efforts have made progress, industry stakeholders must prioritize education, transparency, and security enhancements to protect users from future threats.
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