Although 2023 was another year of multi-billion dollar crypto hacks, the amount of stolen funds recovered from them is a promising sign for market participants.

Blockchain security firm PeckShield found that of the $2.61 billion in losses that stemmed from more than 600 major crypto hacks, $674.9 million had been recovered. 

PeckShield also noted that decentralized finance (DeFi) protocol still remained the prime targets for hackers, with these platforms accounting for 67% of the year’s thefts, 40% of which involved flash loans.

Still, the fact that 25% of the value stolen across the major hacks monitored in the year suggests that efforts to mitigate the damage from these events have not been entirely a lost cause. 

DeFi platforms typically work with centralized exchanges and stablecoin issuers to freeze all the wallet addresses associated with the malicious actor. In some cases, the teams behind these platforms also contact law enforcement agencies and even reach out to the hackers themselves, attempting to negotiate a return of funds. 

Most recently, crypto exchange Poloniex tracked down the identity of the hacker that stole $120 million. Poloniex’s majority shareholder Justin Sun sent the hacker’s wallets blockchain messages, offering a $10 million “white hat” bounty in exchange for the funds. 

In this instance, the hacker did not respond to the demands, but Poloniex managed to freeze a portion of the funds associated with the hackers address, mitigating the total amount lost to some extent.