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Journalist
Hassan Shittu
Journalist
Hassan Shittu
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According to a report by Web3 security firm Cyvers, publicized through Nairametrics, pig butchering scams emerged as the most significant threat to crypto users in 2024, accounting for $3.6 billion in losses.
This type of long-term fraud, which involves scammers grooming victims over time to siphon funds, primarily targeted users on the Ethereum blockchain.
The report highlights a 40% increase in cyber threats compared to the previous year, with 165 incidents causing $2.3 billion in damages.
While this is a decline from the $3.96 billion lost in 2023, the persistence of these schemes has become the main topic of discussion, exposing the vulnerabilities within the crypto ecosystem.
Access control breaches were the primary attack vector, leading to $1.9 billion in losses across 67 incidents.
Smart contract exploits and address poisoning were also significant, resulting in $456.8 million and $68.7 million in losses, respectively.
Despite ongoing recovery efforts, including the return of $1.3 billion through bug bounty programs and on-chain investigations, pig butchering scams continue to outpace other forms of crypto fraud
Pig Butchering Scams: How Scammers Steal Crypto From Victims
Pig butchering scams involve long-term manipulation where victims are contacted through unsolicited messages and drawn into fraudulent crypto investment schemes.
The scammers build trust by engaging with victims over time, eventually convincing them to transfer large amounts of money to fake investment platforms.
According to Cyvers, Ethereum was the most affected blockchain this year, with over 150,000 addresses and 800,000 transactions involved in these scams.
As the report pointed out, one factor contributing to Ethereum’s vulnerability is its open and accessible nature, which allows scammers to send numerous small payments to potential victims as part of their grooming process.
These microtransactions are designed to build familiarity and credibility before the larger theft occurs.
As one of the proposed solutions, the CEO of Cyvers, Deddy Lavid, shared that educating users on access control breaches and enhancing exchange transparency are crucial in mitigating the risks associated with pig butchering scams.
The report notes that most scams involved Tether (USDT) and were laundered through centralized and decentralized exchanges, including Binance, HTX, OKX, and Coinbase.
Notably, the scams followed a recurring pattern. Stolen funds were funneled through multiple networks, making it difficult for authorities to track and recover assets.
Major Incidents and Recovery Efforts in 2024
According to the report, access control breaches and exchange vulnerabilities dominated the largest crypto thefts in 2024.
Among the most significant incidents was the $305 million hack of Japanese exchange DMM Bitcoin, caused by a compromised private key in the platform’s hot wallet.
Similarly, WazirX, India’s largest exchange, lost $235 million due to a multi-sig wallet vulnerability.
Radiant Capital also suffered a $50 million loss after attackers compromised employee devices, while BingX lost $52 million through hot wallet exploits.
Despite these substantial losses, recovery efforts have yielded some positive results.
On-chain detectives like ZachXBT played a crucial role in recovering $1.3 billion in stolen funds throughout 2024.
Among his recent discoveries was the $500K stolen through X account hacks.
Just yesterday, Dec 26, a report showed a new X account was hacked to promote fake token.
According to the report, bug bounty programs, which incentivize ethical hackers to identify and fix vulnerabilities, also contributed significantly to these recovery efforts.
The report also highlighted quarterly trends. Q3 saw the highest losses, at $760 million, while Q4 recorded the lowest activity and financial damage.
