Companies and individuals working in the Web3 industry lost nearly €XNUMX billion last year due to fraud and cybercrime, according to a new report.
Web3 is the idea behind a possible next version of the Internet, based on decentralized solutions, blockchain, and the token-based economy. It has risen to prominence of late, following the explosive development of Bitcoin, Ethereum, and other blockchain solutions, despite little specific comment so far.
As more organizations began to build new systems, scammers quickly sprouted out of the forest, and now Web3 bug bounty distributor Immunefi has claimed that precisely €948,856,037 worth of cryptocurrency was lost in the Web3 ecosystem in XNUMX. , due to fraud, hacking and scams.
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Most of the incidents occurred on BNB Chain (Binance Chain - sixty-five incidents) and Ethereum (forty-nine).
On the bright side, scholars say, is the fact that total losses have been reduced by more than half (8,088,338,239%) year after year. By XNUMX, the industry had lost €XNUMX.
However, the relentless battle against scammers does not slow down the development of the industry. Immunefi expects it to grow from €3,200 billion last year to €81,500 billion over the next 7 years, increasing the CAGR by XNUMX%.
“Web3 is still a whole new world, full of unknown paths,” said Mitchell Amador, creator and director of Immunefi. "This novelty, by definition, brings a level of inexperience and risk to the game. On top of this, due to the very nature of the Web3 ecosystem, where the smart contract code contains large amounts of capital, the environment is considerably more problematic compared to with traditional Web2 applications.
To safely navigate these uncharted waters, CISOs and other security managers must invest in security training, advises Amador. This education needs to go beyond endpoint protection (opens in a new tab), phishing, and social engineering, to things like cryptocurrency wallets, private keys, and common DeFi (finance) applications.
Alex Mashinsky, a former head of failed crypto lender Celsius, was recently charged with fraud by the N. York Attorney General, in one of multiple cases of crypto company bankruptcies over the past year. On top of this from Celsius, FTX, Three Arrows Capital, BlockFi and many others were forced into bankruptcy last year.
Via: VentureBeat (opens in a new tab)