The losses were significantly lower than in 2022’s first and fourth quarters, when hackers took around $1.3 billion and $950 million, respectively. According to CertiK, the low amount of losses may be linked to events happening off-chain that had an impact on the crypto industry as a whole, such as the issues with Silvergate Bank and the depegging of USD Coin (USDC) at the height of the Silicon Valley Bank collapse.
Out of the funds stolen within the quarter, over $31 million was lost to 90 exit scams, while more than $222 million was lost in 52 flash loan and oracle manipulation exploits. Regarding incidents and the amount lost per blockchain, CertiK highlighted that BNB Chain had 139 incidents, the greatest number for the quarter. Meanwhile, despite having fewer incidents, Ethereum had $221 million in losses, the most lost in Q1 2023.
Despite being much lower than Q1 2022 and Q4 2022, the first quarter of 2023 was still met with hundreds of millions lost, with 60% coming from the recent Euler Finance hack. On March 13, the protocol was hacked through a flash loan exploit, leading to losses of over $195 million.
While the amount lost to hacking looks enormous at a glance, a huge chunk of the funds was recovered through negotiations with hackers. On April 4, Euler Finance announced that it was able to recover around 90% of the lost funds after almost a month of back-and-forth negotiations with the hacker.
This trend has been witnessed in the space more frequently with other hacks following Euler’s example. On April 6, lending protocol Sentiment also recovered around $870,000 after giving a bounty of $95,000 to those responsible for taking almost a million dollars from the platform.