The BNB Chain has become the top target for rug pulls and exploits in the first quarter of 2023, according to a recent report from Immunefi, a blockchain security firm.
The report stated that over 73.3% of such scams across the entire crypto ecosystem occurred on the BNB Chain during this period. Ethereum also suffered significant losses, accounting for 27.5% of all incidents.
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The study reviewed all instances of black hat hackers exploiting various crypto protocols and cases of protocols allegedly performing rug pulls in Q1 2023. In total, there were 73 such instances, resulting in a loss of $437,483,543 across the Web3 ecosystem.
Hacks accounted for $418,589,089 across 59 specific incidents, while fraud accounted for $18,894,454 across 15 specific incidents. Euler Finance and BonqDAO were the two projects that lost most of the sum during this period.
Despite the decrease in losses compared to Q1 2022, where hackers and fraudsters stole $1,229,500,867, the report highlights that the rise in targeted attacks and scams on Arbitrum-based projects moving into 2023 is becoming more relevant.
The protocol recently released its token, and the report shows that token prices drop on average by 20% after hacks, with the majority never recovering.
The report also reveals that DeFi remains the main target of successful exploits at 99.6%, compared to CeFi at 0.4% of the total losses. BNB Chain and Ethereum represent more than half of the chain losses in Q1 2023 at 68.8%.
In total, $177,250,000 of stolen funds have been recovered across two specific instances, Euler Finance and SperaxUSD. However, this represents just 40.5% of the total losses in Q1 2023.
BNB Chain’s Security Vulnerabilities
The report also sheds light on BNB Chain’s ongoing issues with developers using forked code and its community lacking a security-first approach, which attracts many looking for a quick way to earn money. It may be why the ecosystem continues to see the largest number of exploits and rug pulls.
Adrian Hetman, Tech Lead of the Triaging Team at Immunefi, commented on the findings, stating that:
BNB Chain continues to be the prime target for exploits and scams. That’s why we continue to see the biggest number of exploits and rug pulls in this ecosystem.
The report’s key insights highlight the significant security challenges facing the crypto ecosystem, particularly with the rise in targeted attacks and scams. The community must adopt a more security-focused approach to prevent further losses and protect user funds.
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