Crypto News

A blockchain security firm Immunefi report revealed that losses from cryptocurrency fraud and hacks decreased by 12% compared to the previous year.

The total amount lost in the month was $52 million, down from over $59 million in the same month last year. This represents a 28% decline from the amount lost in April. The report shows a consistent trend of decreasing losses from hacks and fraud in the Web3 industry.

In March, Immunefi reported a 23% decline in losses for Q1 2024 compared to the previous year. In April, CertiK reported the lowest losses ever for that month.

According to Immunefi’s report, most of the losses in May were caused by two individual attacks. The first was a hack of the Web3 gaming protocol Gala Games, which resulted in approximately $21 million in losses. The second was a smart contract exploit against Sonne Finance, which led to $20 million in losses. Together, these two attacks made up 78% of the total losses for the month.

In May, Ethereum and BNB Smart Chain were the two networks most targeted by attackers, accounting for 62% of the attacks. All of the attacks were against decentralized protocols, and no centralized exchange lost funds from an attack.

Fraud made up a small portion of the overall losses, totaling only $1.7 million or 13.6% of the total losses. Hacks and exploits caused the majority of the losses. Immunefi’s report did not speculate on why the monetary loss from exploits has declined. In 2023, there were smaller losses than in 2022, which experts attribute to advancements in security technology and police practices.

In April, Blockaid claimed that its software had caused some crypto drainers to shut down, reducing at least one type of threat that crypto users face.

Abu Dhabi authorities have announced that farms cannot be used for cryptocurrency mining activities. Cryptocurrency mining involves using powerful computers to verify transactions and create new coins, which consumes significant energy. 

While blockchain-related activities are allowed in the UAE, strict regulations are in place. The Abu Dhabi Agriculture and Food Safety Authority (Adafsa) issued a directive to farmers on Thursday, emphasizing that cryptocurrency mining on farms is not allowed due to the potential increase in electricity bills. 

Adafsa considers this activity a misuse of farm resources for unintended purposes. According to Adafsa’s announcement, individuals caught engaging in crypto mining on farms may face fines of up to Dh10,000.

Despite the prohibition, the UAE has become a supportive jurisdiction for Bitcoin mining. On December 5, 2023, Phoenix Group PLC, a prominent cryptocurrency mining, technology, and blockchain company, saw a 44% surge in its share price when listed on the Abu Dhabi Exchange (ADX). 

This event marked the first public listing of a crypto mining and blockchain technology company in the Middle East, demonstrating the region’s rapidly expanding tech and fintech sectors. Previously, Phoenix Group had an exclusive sales partnership for Bitmain’s mining hardware in the Middle East. While continuing to use Bitmain equipment at their Abu Dhabi facility, the company also secured a landmark $650 million order for additional mining rigs from Bitmain in November 2021. 

Their recent agreement with Whatsminer further strengthens Phoenix Group’s strategic alliances and diversifies its mining hardware portfolio, solidifying its status as a major player in the global mining industry. The UAE’s venture into mining began in 2021 when its sovereign wealth fund, Zero Two (formerly known as FS Innovation), partnered with local miner Phoenix Technologies to establish a 200 MW hydro-cooled facility.

Chainalysis, a blockchain data and analytics company, has recently announced the opening of its regional headquarters in Dubai in Southern Europe, the Middle East, Central Asia, and Africa. 

The company has been working closely with the local government to offer advice on best practices for regulatory development in the crypto industry, which would promote innovation. Chainalysis has partnered with the United Arab Emirates’ Ministry of Artificial Intelligence, Digital Economy, and Remote Work Applications to establish an excellence center for government employees to enhance their understanding and expertise in blockchain technology. 

Additionally, the company has set up a Centre of Excellence to train government employees in blockchain technologies. In another development, Chainalysis signed a memorandum of understanding with Emirates NBD, which would support the banking leader’s Digital Asset Lab program.

Michael Gronager, CEO of Chainalysis, said that the UAE government has “spearheaded the crypto revolution” with its crypto-related policies, noting: “The true potential and value of cryptocurrencies lies in their ability to transfer value, and we’re seeing an upward trend of overall transfer activity… the UAE is strongly positioned to lead innovation with novel use cases that deliver tangible value to consumers and businesses.”

An increasing number of crypto and Web3-related companies have chosen Dubai as their home in the last year. One of these companies is Chainalysis. Nicola Buonanno, Chainalysis’ vice president of Southern EMEA, said that the market in the UAE is at a “tipping point,” with institutional-sized transfers now accounting for the majority of the country’s crypto activity. As a result, the need to investigate the local industry for better compliance, market intelligence, and data solutions is “greater than ever.” 

Binance reportedly received its long-awaited license to operate as a cryptocurrency exchange in Dubai on April 18. Additionally, on May 7, in Abu Dhabi, QCP Capital, a crypto options desk, received its in-principle approval to offer regulated digital asset activities in the region.

The UAE blockchain ecosystem sector witnessed significant growth over the past year, recording 13.3% year-on-year increase, according to Crypto Oasis. 

During the Dubai FinTech Summit 2024, Crypto Oasis said the UAE blockchain ecosystem has active companies surging from 1,800 to 2,040, a surge that shows the industry’s robustness and innovation, bolstered by a workforce of over 10,600 professionals. 

The sector comprises 71% native blockchain organizations and 29% non-native companies contributing to the ecosystem.

The UAE’s blockchain landscape is thriving, and a diverse range of organizations are contributing to its success. Traders, brokers, and asset managers lead the way with 20.6%, followed closely by technology and advisory services at 19.9%. NFT platforms, venture capitalists, and the metaverse are also significant contributors. However, despite efforts to attract Web3 gaming companies, their presence remains modest at 3%, indicating room for growth. 

Tokenization platforms are carving out a niche and represent 1.5% of the country’s blockchain organizations. The past year has been pivotal for the UAE’s blockchain space, cementing its position as a global leader in innovation and disruption. Regulatory initiatives led by the Virtual Asset Regulatory Authority (VARA) have ensured responsible growth and market integrity. Notable milestones include granting licenses to leading crypto service providers such as Binance, OKX, Crypto.com, and others, enhancing the region’s appeal to blockchain enterprises.

Cryptocurrency adoption in the UAE has experienced a significant surge, cementing the country’s status as a growing hub for digital finance. The regulatory approval of Ripple’s XRP token by the Dubai Financial Services Authority (DFSA) and establishing the Iota Ecosystem DLT Foundation in ADGM highlight the country’s welcoming embrace of innovative technologies.