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Losses due to cryptocurrency scams are on the rise
Losses due to cryptocurrency scams are on the rise
Security

Losses due to cryptocurrency scams are on the rise

By Amelia Tomasicchio - 12 Feb 2020

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Approximately $4.5 billion is the astronomical figure related to losses due to cryptocurrency scams during 2019.

Unfortunately, as mentioned even today, there are many fraud attempts by hackers and criminals who take advantage of the still low level of knowledge in the sector.

According to a report by CipherTrace reported by Reuters, $4.2 billion was lost as a result of these scams, an increase of 160% compared to 2018, when losses amounted to $1.74 billion.

Dave Jevans, CEO of CipherTrace, a cybersecurity company, explained.

“We noticed a significant uptick in malicious insiders scamming unsuspecting victims or leaching on their users through Ponzi schemes. Attacks from the inside of organizations lead to significant exits with major consequence to the crypto-ecosystem”.

For example, one of the scams that lost the most money was the PlusToken Ponzi scheme, which led people to invest $3 billion, but which turned out to be a scam.

Not to forget also the $135 million lost by the Canadian QuadrigaCX trading platform and the various exchange hacks that keep on increasing. Only in 2019, in fact, almost 20 exchanges closed, some of them because of exit scams or hacker attacks.

Among other things, it has been discovered that the most common scams do not use any kind of innovative technology – neither crypto-jacking nor complicated hacking. Instead, they are based only on the ignorance of people who do not check the date of creation of the website or the company that created it. Some are even confident in sending their seed, not knowing that it actually means handing over their private key to a stranger.

Another popular method used by scammers is to use famous people as fake testimonials of their Ponzi scheme, as happened for example in the case of Hugh Jackman and many other celebrities, like Antonella Clerici in Italy. Some time ago, the famous Italian TV show Striscia la Notizia also awarded its “Tapiro d’Oro” to singer Jovanotti for being involved – obviously without his knowledge – in the Bitcoin Future scam.

 

Amelia Tomasicchio
Amelia Tomasicchio

As expert in digital marketing, Amelia began working in the fintech sector in 2014 after writing her thesis on Bitcoin technology. Previously author for Cointelegraph and CMO at Eido. She is now the co-founder and editor-in-chief of The Cryptonomist.

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