Kaspersky Labs Says $10 M in ETH Stolen This Year Via Social Engineering Scams

  • New fraud crypto schemes identified, based on simple social engineering methods
  • Criminals are targeting anyone with an interest in crypto
  • Most popular targets for criminals are ICO investors and giveaway scams

While governments around the world wrangle over the legal status of cryptocurrencies and laws to regulate them, scammers are busy exploiting the digital gold rush. A new report from global cyber-security firm, Kaspersky Labs says that a relatively new fraudulent trend, cryptocurrency social engineering schemes, helped criminals net nearly $10m this year.

Kaspersky says the increasing popularity of cryptocurrencies is attracting record numbers of sammers and in the first half of 2018, its products blocked more than a hundred thousand triggers related to cryptocurrencies on fake exchanges and other sources.

Besides hacking exchanges, exploiting smart-contract vulnerabilities, and deploying malicious miners, cybercriminals are also resorting to more traditional social-engineering methods that can reap millions of dollars. Their targets are not just the owners of cryptocurrency wallets, but basically anyone with an interest in the subject.

Some of the most popular targets for criminals are ICO investors, cyber-criminals create fake web pages that simulate the sites of official ICO projects, or try to gain access to their contacts so they can send a phishing email with the number of an e-wallet for investors to send their cryptocurrency to.

Another sought-after trend involves cryptocurrency giveaway scams. Victims send a small amount of cryptocurrency, in exchange for a much larger payout of the same currency in the future. Criminals use social media accounts of well-known individuals, such as Elon Musk, by creating fake accounts or replying to tweets from legitimate users through fake accounts, criminals are able to confuse Twitter users into falling for the scam.

Nadezhda Demidova, Lead web content analyst, Kaspersky Lab says:

These new fraud schemes are based on simple social engineering methods, but stand out from common phishing attacks because they help criminals make millions of dollars. The success criminals have enjoyed suggests that they know how to exploit the human factor, which has always been one of the weakest links in cybersecurity, to capitalize on user behaviors.

Nadezhda Demidova, Lead web content analyst, Kaspersky Lab.

Luxury Cars and $15 Million in Crypto Seized in Chinese Arbitrage Scam Bust

Michael LaVere
  • Chinese authorities seized $15M in crypto and several supercars following scam ring bust.
  • The group was allegedly operating an arbitrage scam that promised users fake Huobi Tokens. 

Chinese authorities have reportedly seized more than $15 million in crypto-assets and $2 million in supercars after busting up an arbitrage scam selling counterfeit tokens. 

According to a report by China’s Ministry of Public Security, police in the city of Wenzhou arrested 10 individuals connected to operating a fraudulent cryptocurrency scheme. The report claims the arbitrage group was scamming victims using blockchain smart contracts to generate fake cryptocurrencies. 

Following the bust, authorities seized bitcoin, ether, and tether worth over 100 million yuan ($15 million). The report also claims police seized several supercars, including a Ferrari and a McLaren valued at more than $2 million, in addition to the luxury villa in which the scammers were staying. 

The arrested individuals had reportedly operated a smart contract scheme since 2019, which advertised a blockchain product that claimed to generate Huobi’s native token HT. Unsuspecting consumers were promised the tokens would generate arbitrage opportunities worth a return of up to 8%. 

One victim, identified as Li in the report, first notified police after joining a Telegram group belonging to the scam artists. 

Li told authorities, 

Simply put, you send one unit of ETH to a designated address, you will receive 60 HT. And then you can sell it to gain the difference.

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