A cutting-edge blockchain security system promises to ward off approximately 99% of all cryptocurrency thefts and frauds, with an estimated loss to the industry amounting to around $2.3 billion in the year 2024.
One major challenge hindering widespread cryptocurrency acceptance is the issue of hacks, as reported by cybersecurity company Chainalysis. They found that losses from hacked digital assets this year have increased by 40% compared to last year’s total.
On the other hand, a new blockchain security approach could potentially stop most cryptocurrency frauds, as it verifies and authenticates transactions outside of the main blockchain network before they occur.
According to Michael Pearl, Vice President of GTM Strategy at a blockchain security company called Cyvers, off-chain transaction validation could potentially prevent more than 99% of all future cryptocurrency frauds and hacking incidents.
Pearl explained to CryptoMoon that with both a monitoring system and a proactive defense mechanism in place, this complete solution can effectively block approximately 99.9% of all cyberattacks. This includes previously unknown threats, such as zero-day hacks.
More and more wallet providers and centralized exchange platforms (CEPs) have expressed growing interest in Cyvers’ transaction verification system. This versatile solution is not only suitable for smaller retail transactions but also complex blockchain transfers like flash loans, pointed out Pearl.
In 2024, crypto phishing scams continued to pose a significant threat, causing approximately $1 billion in stolen funds across 296 separate instances. Notably, at least three of these incidents resulted in losses exceeding $100 million each, demonstrating the devastating impact such attacks can have.
Offchain transaction validation could have prevented $230 million WazirX hack
According to Pearl’s statement, Cyvers’ proposed solution might have spotted the malicious smart contract linked to the $230 million WazirX hack as much as eight days prior to the financial loss.
Pearl pointed out that the proposed solution might serve as a defense mechanism against potential attacks on Centralized Exchange Systems (CEXs), where a singular weak spot exists for attackers.
“The reason that [CEXs] are the weak links is the fact that eventually you have one, two, or three hot wallets that are holding billions of dollars and exchanges have this conception that the funds are protected by multi-sig or multi-party computation.”
In 2024, access control vulnerabilities, which are types of attacks, were responsible for approximately $1.9 billion in stolen cryptocurrency value, making up more than 81% of the total losses from crypto hacks. This was based on a study by Cyvers in their 2024 report, which recorded 67 cybersecurity incidents.
In other words, smart contract vulnerabilities were the second most common cause of cyber attacks, leading to a total loss of approximately $456 million in 98 separate instances, which represented around 19% of the overall value that was stolen.
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2025-01-10 15:14