Blockchain security experts are sounding the alarm about the potential risks that crypto projects and investors may face in 2024. While there has been a notable decrease in scam and hack-related losses, dropping from $4 billion in 2022 to $1.7 billion in 2023, industry analysts caution that threats are evolving and becoming more sophisticated.
Phishing scams with AI-powered advancements
One of the foremost concerns highlighted by experts is the increasing sophistication of phishing scams. Jesse Leclere, a blockchain analyst at CertiK, pointed out that phishing attacks are expected to target individual users and corporate systems.
These attacks will employ social engineering tactics customized for the crypto context. He cited the December 14 Ledger Connect exploit as an example of a highly advanced attack.
The use of generative AI makes these phishing scams even more nefarious. Hackers can now automate their operations and create convincing fake calls, videos, and messages to deceive potential victims. Jenny Peng, a research analyst at 0xScope, emphasized that AI could significantly generate realistic “deep fakes” to fool crypto users.
BRC-20 exploits and security concerns
The emerging BRC-20 ecosystem is also drawing attention from hackers due to a relative lack of security developments. Peng noted that the BRC-20 UniSat wallet, launched in early 2023, was promptly targeted with a double-spend exploit.
This incident underscores the need for rapid infrastructure evolution in the BRC-20 ecosystem to match the security standards of more established platforms like Ethereum.
Cross-chain bridges have long been a pain point for the crypto industry, and experts believe they will continue to pose security concerns in 2024. As the industry increasingly adopts cross-chain solutions for greater interoperability, these protocols become attractive targets for attackers.
Vulnerabilities can arise from the complex interactions between different protocols and chains. Several major crypto hacks have resulted from bridge exploits, including the infamous $650 million Ronin bridge hack.
The growing sophistication of crypto illicit actors
Phil Larratt, director of investigations at Chainalysis, has warned that malicious actors are poised to become more sophisticated in 2024. With traditional organized criminals and financial crime actors increasingly embracing crypto, the next wave of scammers will employ advanced tactics and techniques to evade detection and capture.
Larratt anticipates that illicit actors will increasingly turn to privacy coins, bridges, mixers, and other obfuscation tools to cover their tracks.
In response to this evolving threat, he emphasizes the need for intensified investigations, enhanced training and knowledge sharing among law enforcement agencies, more advanced fraud protection programs, and continued collaboration between the public and private sectors.
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