Crypto currency losses resulting from hacks and scams declined by $452 million in the first quarter of 2023, as revealed in a report titled ‘Report: $452m Lost in Crypto in Q1 2023. New Trends of Hacks and Scams’ by De.Fi, an antivirus and app provider firm. This marks a significant decrease of 65.23% compared to the $1.3 billion recorded in the same period the previous year.

The report highlighted that March alone accounted for $215 million in losses, emphasizing the rapid pace at which scammers have been operating in recent weeks.

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The report further noted that flash loan issues were the leading cause of losses in Q1, with over $200 million lost through this channel. The Ethereum chain recorded the highest losses during the quarter, according to the firm, which claims to maintain the largest database of hacks, scams, and exploits in the crypto world.

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On the recovery front, $130 million was recovered in Q1 2023, translating to a recovery rate of 28.7%. This is lower than the corresponding period in 2022, where $520 million, or 40% of the funds, was recovered. Scammers leveraged new tokens to lure unsuspecting crypto investors in Q1, with tokens being the most popular targets this year.

The report highlighted the need for heightened risk management and vigilance by investors when investing in the decentralized finance (DeFi) sector, as the significant surge in financial losses in Q1 underscores the growing threat of scams.

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The report also cited other studies that revealed the prevalence of scams in the crypto space, with 24% of tokens created in 2022 being identified as scams, leading to investors spending $4.6 billion on such scams last year.

As the adoption of cryptocurrencies continues to grow in many countries, including Nigeria where 27% of internet users own cryptocurrency assets, it is crucial for investors to educate themselves on potential dangers and implement appropriate measures to protect their investments from scams and hacks.