Crypto fraudsters have now been reported to have stolen almost $700 million worth of assets from crypto platforms in the first quarter of 2022, according to the recent findings by the Atlas VPN team.
As per the report, the number of blockchain-related breaches and scams in the first quarter of 2022 was all-time high for the industry, representing a 118% increase compared to the same period in 2021.
From January to March 2022, hackers took $682 million in as many as 72 hack events, with more than half of the losses attributed to hacks on Solana (SOL) and Binance Smart Chain (BSC) ecosystems.
In four major attacks, Solana suffered a loss of $397 million. The biggest hack was on Wormhole, a communication bridge between Solana and other decentralized finance (DeFi) networks, during which the platform lost around $334 million.
Binance Smart Chain was targeted as many as 12 times, during which the crypto hackers took a total amount of $99 million.
According to the report, non-fungible tokens (NFTs) have proven among the most attractive targets for hackers, accounting for almost $49 million looted in 20 attacks. A particularly popular type of fraudulent activity in this category was rug pull scams, in which scammers were launching NFT projects, only to disappear with millions of dollars of investors’ money.
Conclusively, crypto exchanges lost $42 million in assets during three attacks, while users of the Ethereum platform were mugged by close to $25 million in 16 events during the observed period.
The big issue
Crypto fraud has become a global issue due to the worldwide spread of cryptocurrencies. Leading crypto analyst firm, Chainalysis, reported that over $7.7 billion was lost worldwide due to crypto scams in 2021 alone.
Cybercriminals have adopted several underhand techniques such as ‘rug pulls’ to scam investors and siphon their funds away – creators of a ‘crypto project’ get the investor funds under their control and then abscond by abandoning the project.
The anonymous nature of blockchain tech allows a lot of criminals get away with such schemes, which have especially proliferated on social media. The US has also been susceptible to multiple ‘rug pull’ schemes, resulting in losses of millions of dollars, forcing them to take a stricter stance on cybercriminals.
Last week, Technext reported how hackers stole over $600 million from video game Axie Infinity’s Ronin network bringing to the fore the vulnerability and insecure nature of blockchain technology.
Cybercriminals have set their target on the crypto space, primarily because of its unregulated nature. It is important to take some measures to prevent being caught up in any form of crypto scam.
- Do not put money in a virtual currency or cryptocurrency if you do not have a proper understanding of how it works.
- Do not go into cryptocurrencies with money that you cannot afford to lose.
- Do not invest in or trade cryptocurrencies based on advice from someone you met online.
- Don’t believe social media posts promoting cryptocurrency giveaways.
- Don’t share your private keys/seed phrase, which enables you to access your virtual currency, with anyone. Keep them in a secure place (preferably offline, where they cannot be hacked).
As the crypto ecosystem continues to gain scale and complexity, it will undoubtedly remain a top focus of scammers. By understanding the common ways scammers usually use to steal information and ultimately money; traders and investors would be able to spot crypto-related scams early and prevent it from happening to them.
Get the best of Africa’s daily tech to your inbox – first thing every morning.
Join the community now!