Scammers Swindled Cryptocurrency Investors Out Of Over $670 Million So Far This Year

Ali Raza
  • Research suggests scammers and hackers swindled cryptocurrency investors out of $1.7 billion in the last seven years.
  • In the last three months alone, cryptocurrency investors lost over $670 million.
  • The spike is blamed on the cryptocurrency ecosystem's growth

It might initially come as a shock, but as Bitcoin and other cryptocurrencies began their rise to prominence, so did hackers' attempts to steal as much as they can. Crypto Aware recently discovered that hackers and online scammers have managed to get away with around $1.7 billion in cryptocurrencies during the last seven years. About $670 million were taken in 2018.

During the seven-year period between 2011 and 2018, over $1.7 billion in cryptocurrencies were reportedly stolen. According Business Insider, 40 percent of that amount was taken from users in the last three months.

The largest cryptocurrency theft this year saw Tokyo-based cryptocurrency exchange Coincheck lose over $530 million worth of NEM.The embattled exchange is set to be acquired by Japanese brokerage firm Monex.

Why Cybercriminals Choose Cryptocurrencies

According to Crypto Aware founder Anna Wu, the main reason for this sudden increase in cryptocurrency thefts might be the ever-growing validation cryptocurrencies are receiving. She stated:

"Cryptocurrency is receiving more and more validation as a means of value transfer, with top coins reaching historically high prices toward the end of last year — this attracted a lot of new, unseasoned investors who are not well-versed in terms of online security and who are identified as easy targets by scammers."

Anna Wu

Partly thanks to the ongoing ICO trend, the cryptocurrency market managed to grow tenfold in a single year, going from $27 to $270 billion in 12 months. ICOs are now being used by cybercriminals to scam unsuspecting investors.

Wu advised cryptocurrency enthusiasts to be aware of fraud, scams and hacks when the market is bullish, as these periods attract scammers. Bullish periods, she says, also attract gullible investors.

Fraudulent ICOs

A recently conducted study claims nearly 80 percent of ICOs were scams designed to trick investors. Moreover, it states 6 percent of the projects behind ICOs failed, while 5 percent had simply "gone dead". When all is said and done, only 8 percent of ICOs managed to trade on an exchange.

Based on these results, Anna Wu stated coin offerings should be approached with a lot of caution. Scammers recognize gullible investors, and recent statistics show that they are becoming very good at it. She noted that investors shouldn’t invest more than they can afford to lose, and should always inspect URLs.

She added:

"If it seems too good to be true, it is. Investment scams often try to entice gullible investors with unrealistic returns. Don't be greedy."

Anna Wu

TRON Foundation Announces $20 Million TRX Buyback to Promote Market Stability

The TRON Foundation, an organization created to support the development of the TRON network, has recently announced a $20 million TRX token buyback that’s set to “promote community activity and market stability.”

According to a Medium blog post, the TRX buyback will be “by far the largest” token buyback plan the Foundation has ever had, and will have “the widest coverage in the secondary market.” The buyback is set to last for a year and will have several batches.

The TRON Foundation’s TRX holdings, it added, will be unlocked on January 1 of 2020, although the organization has no plans for its TRX at the time. Currently, one TRX token is trading at $0.034 after falling 10.6% in the last 24-hour period.

The token’s price dropped amid a major market sell-off that has seen the price of some altcoins – including Litecoin, EOS, and XRP – drop by well over 10%. The price of BTC is currently down 5.4% in said period. The selloff is likely being caused by traders taking profits off of the bull run we’ve been seeing since the beginning of the year.

Earlier this year, TRON announced a soon-to-be-released upgrade for its blockchain, called Odyssey 3.6. It’ll reportedly include features that are set to improve the network’s security and stability.

As CryptoGlobe covered, in May of this year the TRON Foundation announced BitTorrent, a leading peer-to-peer file sharing platform, would be incorporating the BitTorrent File System (BTFS) protocol to “allow users to receive and host storage on their computers with other individuals and businesses.”

The TRON Foundation has recently celebrated its Independence Day, as on June 25, 2018 the TRON mainnet was launched and its genesis block was created. Since then, the network has grown to over 3.1 million mainnet addresses, and an average of 1.5 million transactions per day, according to Justin Sun.