Blockaid report: Crypto blacklisting failed to recover funds from 60 attacks

A report from security firm Blockaid reveals that between January 5 and August 5, 60 cryptocurrency attacks resulted in the loss of $1.18 billion. The investigation found that traditional recovery methods, such as issuer blacklisting and exchange freezes, failed to recover a single dollar from the initial theft in these incidents.

Of the total $1.18 billion lost, only $9.8 million was recovered for victims, representing a recovery rate of just 0.8 percent. While $81.4 million remains frozen, $1.04 billion is considered lost. The report notes that recovered funds primarily stemmed from government interventions and validator actions rather than automated or issuer-led blacklisting.

The lack of success is attributed to the speed of the attackers. On average, stolen funds were moved within 17 minutes of the initial transaction, with 22 percent of cases seeing movement within the first minute and 68 percent of funds dispersed within the first hour. In several instances, such as the Arbitrum CPK and Aztec Connect cases, there was no reaction time available before the funds were distributed across multiple addresses.