How security, education and regulation can mitigate rising crypto scams

Crypto losses to bad actors have significantly increased in the last two years, but cybersecurity experts believe there is no cause for concern, as most new tech is exploited during the early days of its use. 

According to blockchain security firm CertiK’s annual Web3 security report for 2022, malicious actors drained over $3.7 billion in value from Web3 protocols last year, representing a 189% increase over the $1.8 billion lost in 2021.

CertiK’s report for the first quarter of 2023 also revealed that hackers accessed over $320 million in the first three months of the year.

Kang Li, the chief security officer at CertiK, told Cointelegraph that new technology is often a target for exploitation and the crypto industry is just the latest to suffer from its own success. 

“As new technologies emerge, they often become targets for malicious activities, simply because they present new vulnerabilities and possibilities for exploitation,” Li said.

“This has been seen throughout history, from the early days of the internet to the rise of email and, more recently, with the advent of blockchain and cryptocurrency,” he added.

According to Li, because the industry is still relatively new and rapidly evolving, some players are more focused on growth and innovation than on security, making them vulnerable to attacks and potentially contributing to the large number of losses recorded.

Data gathering platform Statista predicts that the crypto industry, which has seen massive growth since 2017, will keep expanding, with revenue projected to reach $64.87 billion and total global users expected to hit 994 million by 2027.

Li says this rapid rise in users and revenue, combined with some of the industry’s innovations, could also contribute to protocols being exploited. 

“Blockchain technology and the smart contracts that underpin many cryptocurrencies are highly complex; this complexity can create security vulnerabilities that skilled hackers can exploit,” he said, adding, “Cryptocurrencies also hold real value and can be exchanged for traditional currency in many places around the world; this makes them an attractive target for hackers who can transfer and…