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

PayPal is Cautiously Optimistic About Partnership with Libra Association

  • PayPal cautious about future with Facebook's digital currency libra. 
  • Payment platform was one of the first companies to join and support the Libra Association.

Payment platform PayPal is cautiously optimistic about its relationship with Facebook’s digital currency libra, despite being the highest-profile company to join the Libra Association. 

PayPal Backs Libra Association

In June, shortly after the official unveiling of Facebook’s libra, PayPal announced an intention to join and support the Libra Association, a collection of tech and finance companies promoting the product. 

At the time, PayPal billed the digital currency as a revolutionary product for people around the world, 

We believe in democratizing participation in the digital economy for people from all walks of life, and businesses of all sizes.

However, PayPal appears cautious about its future with Facebook’s digital currency. PayPal investor relations vice president Gabrielle Rabinovitch reiterated Sept. 12 that the company is a non-binding agreement with libra, 

It's a non-binding commitment. And obviously, I think there's a lot of work to happen before we get to that point where it becomes something more than just a very exciting idea.

She added, 

The goals and ambitions of Libra are very consistent with PayPal's overall ambitions in terms of serving the underserved; democratizing access to capital. So we very much believe in the potential of Libra.

While PayPal appears optimistic about the future of libra, the digital currency has endured months of regulatory and political scrutiny concerning its release. 

Earlier in the week, senior U.S. Treasury official Sigal Mandelker told an audience in Geneva that libra would be held to the highest standard of regulatory compliance in order to combat money laundering and terrorist funding.

 

Featured Image Credit: Photo via Pixabay.com