Ethereum DeFi Projects Still Favorite Target for Hackers, But Stolen Funds Down 28% in May: Immunefi

By Tarang Khaitan

Hackers were unsuccessful in exploiting any major centralized entity in May, while DeFi protocols witnessed a downtick in losses occurring from hacks and frauds, according to a report from bug bounty platform Immunefi.

$52.4  million was stolen from DeFi investors in May due to hacks and frauds. This represents a 12% decrease in the amount lost from the same period in the prior year. Moreover, it is a sharp decline of 28% from April this year.

In total, there were 21 incidents involving investors losing funds across all chains tracked by Immunefi. Ethereum was the most targeted blockchain, followed by BNB Chain. The networks witnessed 9 incidents and 4 incidents, respectively.

Moreover, while frauds accounted for 7 incidents, the monetary loss amounted to $1.8 million. It's a small loss  when compared to $50.6 million lost due to hackers.

According to the report, the vast majority of the losses in May were due to the $240 million exploit of Gala Games and SonneFinance being hacked for $20 million.

Notably, Gala Games managed to recover ETH worth $22 million from the exploiter, but not before they managed to sell 600,000 GALA tokens on Uniswap.

In a blog post, Gala Games stated that they used the proceeds to buy back and burn GALA tokens minted by the exploit. Since the proceeds did not remove the entirety of the tokens that the hackers had managed to sell, the team had to conduct an additional token burn where the remaining tokens that had been brought into circulation were burnt using tokens from the GALA wallet.

Further, the team has stated they uncovered the identity of the exploiter and are working with law enforcement agencies to take appropriate legal action.

Earlier this week, Ryan Salame, a former FTX executive, was sentenced to 7.5 years in prison for duping FTX customers.

On April 18, Avraham Eisenberg, the man behind the $110 million Mango Markets exploit, was convicted on all counts of commodities fraud, commodities manipulation, and wire fraud.

The decrease in losses occurring from malicious actors is an encouraging sign that the Wild West days of crypto might be coming to an end, with strict legal action playing a key role in the recent development.

Edited by Stacy Elliott.

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