Digital asset investment firm BlockTower Capital has encountered a major challenge after fraudsters breached its main hedge fund. The stolen funds remain unrecovered, and the perpetrators have not yet been apprehended.

The Incident

According to a report by Bloomberg, the hackers managed to partially drain assets from BlockTower Capital's hedge fund. The exact amount stolen is still unclear, but PitchBook data indicates that the firm manages a total of $1.7 billion in assets.

BlockTower has taken immediate action, hiring blockchain forensics analysts to investigate the theft and recently notifying its limited partners about the incident. The firm, however, did not respond to Cryptonews' request for comment by the time of publication.

Previous Security Breach

This is not the first time BlockTower has faced security challenges. In 2023, the firm lost approximately $1.5 million in TRU tokens due to a security exploit on the Dexibel decentralized exchange platform.

About BlockTower Capital

BlockTower Capital was founded in 2017 by Matthew Goetz and Ari Paul. Based in Miami, Florida, the firm focuses on professional trading, venture investing, credit underwriting, and managing portfolios for both digital and traditional assets. BlockTower actively trades liquid crypto assets, invests in real-world credit assets, and participates in next-generation venture investing within the web3 space.

Ongoing Threat to the Crypto Industry

Despite a decrease in the total value stolen from the crypto industry in 2023 compared to 2022, hackers remain a significant threat. While the number of hacking attempts increased from 219 in 2022 to 231 in 2023, the total value stolen dropped by 54.3%, reaching $1.7 billion in 2023.

This decline was primarily due to a decrease in DeFi hacks, with hackers stealing $1.1 billion from DeFi platforms in 2023, a significant drop from the $3.1 billion stolen in 2022.

However, Web3 users still face the risk of losing funds to hackers and scams. In the first three months of 2024, users lost $336 million, with nearly half of the losses occurring in January. Despite the concerning losses, this represents a 23% improvement compared to the same period in 2023.