- Cybersecurity firm CertiK warns that malicious actors may continue to exploit decentralized applications in 2023.
- The firm has also cautioned users to guard their private keys as the success rate of bad actors could be due to poor user security.
- Wallet developers and crypto executives to intensify user education efforts this year to avoid losses.
Digital asset fraud was over $4 billion last year, with the 10 largest grossing $2.1 billion as the industry recorded massive rug pull schemes and flash loan hacks.
Cybersecurity firm CertiK has told users not to expect a respite from bad actors this year but to protect their private keys as hackers may focus on that front this year. The firm stated that the frequent hacks of last year show that bad actors may not slow down in 2023.
“We saw a large number of incidents last year despite the crypto bear market, so we do not anticipate a respite in exploits, flash loans, or exit scams.”
The firm places more emphasis on bridge exploits because malicious actors within the crypto space ran riot last year, stealing over $1.4 on the largest six bridge exploits alone.
On wallet security, the company foresees fewer attacks on digital asset wallets because users have gotten a good grasp of the Profanity tool vulnerability which bad actors used to defraud users in the past. The tool allows users to create ‘vanity addresses’ which can be exploited by malicious players.
According to the firm, wallet hacks this year will be largely caused by poor user security.
“It’s possible that funds lost to private key compromises in 2023 will be due to poor management of private keys, bar any future vulnerability found in wallet generators,” the company added.
Bad actors will cripple the market
Amidst digital assets’ turmoil in 2022, frequent scams put the market in a bad situation. Last year, over $2.1 billion was lost in the ten largest incidents alone, most being attacks on DApps, while in 2021, over $10 billion was lost from DApps.
With several reported flash loan attacks, bridge attacks, and wallet scams, wrong signals were sent to investors and authorities on digital assets. More attacks and scams will lead to stricter regulations which may have a negative undertone in the long run.
This year comes with many prospects for digital assets as key areas look to get more adoption, as suggested by Ethereum’s co-founder Vitalik Buterin last month. Still, the growth in wallets and DApps can be hindered by the activities of bad actors.