A new report from Immunefi highlights a stark reality for the cryptocurrency market: tokens hurt by hacks find it difficult to revert the loss and this often extends to a few years. it impacts even well-established projects as evidenced by the fact that close to 80% of the tokens ended up being negatively impacted.
Crypto Hacks: Why Recovery Takes Years
According to the report that has been shared with Cointelegraph in an exclusivelY, Specifically,77. 8% of hacked cryptocurrencies undergo a significant and long-term decline in prices, including over six months after the attack. The fact that 51% of these tokens suffer losses of their value more than 50% proves the defining effect of security breaches in the market.
The millions that are lost in any hack oftentimes are followed by other losses from market swings, organizational business interruptions and most importantly, the stress that the teams go through.
The time and other resources needed to start the process of rebuilding the trust and operations of the project are tremendous, and as such, they put the projects in rather precarious positions.
2024 Crypto Heist: $1 Billion Vanishes
This report comes at a time when there has been a series of attacks, for instance loss of $230 million in the WazirX exchange, one of the biggest crypto losses in 2024.
Of course, some projects, particularly those as BNB Chain and SushiSwap, were able to restore from such incidents but those are exceptions. The majority of tokens may struggle, as small projects usually do not possess the financial and people’s support to recover.
It is essential to notice that the threat spectrum of cryptocurrencies also broadens as 2024 unfolds, with more than $1.19 billion in digital assets that have been stolen by hackers this year. Frequently, centralized finance (CeFi) platforms are in the focus, and these platforms are believed to be responsible for more than $636 million of such losses.
As the money continues to be stolen, the crypto market requires adequate security measures to prevent mishaps that are likely to harm both users and the future development of cryptocurrencies.
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