Source: news.google.com
Companies and individuals working in the Web3 industry lost nearly $4 billion last year due to fraud and cybercrime, a new report shows.
Web3 is the idea behind a possible next version of the Internet, based on decentralized solutions, blockchain, and token-based economy. It has risen to prominence in recent years, following the explosive growth of Bitcoin, Ethereum, and other blockchain solutions, despite few tangible benefits thus far.
As more organizations began building new systems, scammers quickly came out of the woodwork, and now Web3 bug bounty provider Immunefi has claimed that exactly $3,948,856,037 worth of cryptocurrency was lost in the Web3 ecosystem in 2022, per fraud, hacking and scams.
Improving security
Most of the incidents occurred on BNB Chain (Binance Chain – 65 incidents) and Ethereum (49).
On the bright side, the researchers say, is the fact that overall losses were cut by more than half (51.2%) year-over-year. In 2021, the industry had lost $8,088,338,239.
However, the constant battle against scammers is not slowing down the growth of the industry. Immunefi expects it to grow from $3.2 billion last year to $81.5 billion over the next seven years, increasing a 43.7% CAGR.
“Web3 is still a whole new world, full of unknown paths,” said Mitchell Amador, founder and CEO of Immunefi. “That novelty, by definition, brings a level of inexperience and danger to the game. Also, due to the very nature of the Web3 ecosystem, where the smart contract code contains large amounts of capital, the environment is much harsher compared to traditional Web2 applications.”
To safely navigate these uncharted waters, CISOs and other security leaders must invest in security education, recommends Amador. That education should go beyond endpoint protection (opens in a new tab)phishing and social engineering, in things like cryptocurrency wallets, private keys, and common DeFi (Decentralized Finance) applications.
Alex Mashinsky, the former CEO of failed crypto lender Celsius, was recently charged with fraud by the New York Attorney General, in just one of many cases of crypto companies going bankrupt in the past year. In addition to Celsius, FTX, 3 Arrows Capital, BlockFi, and many others were forced into bankruptcy last year.
Via: VentureBeat (opens in a new tab)
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