Businesses and individuals in the Web3 industry lost nearly $4 billion to fraud and cybercrime last year, according to a new report.
Web3 is the idea behind the possible next version of the internet, built on decentralized solutions, blockchain and token-based economics. It has come to prominence in recent years with the explosion of bitcoin, ethereum and other blockchain solutions, albeit with few concrete returns so far.
As more organizations start building new systems, fraudsters quickly come to the fore, and now Web3 bug bounty provider Immunefi claims that $3,948,856,037 worth of cryptocurrency will be lost to fraud, hacks, and scams in the Web3 ecosystem in 2022.
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Most incidents occurred on the BNB chain (Binance chain – 65 incidents) and Ethereum (49 incidents).
The silver lining, the researchers said, was that overall losses more than halved year-on-year (51.2%). In 2021, the industry lost $8,088,338,239.
Still, the ongoing battle against fraudsters hasn’t slowed the industry’s growth. Immunefi expects it to grow from $3.2 billion last year to $81.5 billion over the next seven years, a CAGR of 43.7%.
“Web3 is still a whole new world, full of uncharted paths,” said Mitchell Amador, founder and CEO of Immunefi. “By definition, this novelty introduces a level of inexperience and danger into the game. Furthermore, due to the nature of the Web3 ecosystem, where smart contract code holds large sums of money, the environment is more complex than traditional Web2 applications.” confrontational.”
To safely navigate these uncharted waters, CISOs and other security leaders should invest in security education, Amador recommends.Education Should Go Beyond Endpoint Protection (opens in a new tab)phishing, and social engineering, including 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, just one of many cases of crypto companies going bankrupt in the last year. In addition to Celsius, FTX, 3 Arrows Capital, BlockFi, and many others were forced into bankruptcy last year.
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