Blockchain heists, especially in the Defi and NFT sectors, continue to run high in 2022 as the Discord server of one of the most extensive NFT collections in the market, Yuga Labs, was hacked on Saturday, according to the announcement on the official Twitter account of the club.
As the team behind the project suggests, around 200 ETH worth of NFTs were “impacted,” which means that users transferred around $360,000 worth of NFTs to scammers. According to an on-chain analyst, OKHotshot, the hack was perpetrated by first compromising the Discord account of Boris Vagner, the Yuga Labs community manager.
The hackers then used unfettered access to share phishing links on the official BAYC, Otherside, and Mutant Ape Yacht Club (MAYC) channels.
Yuga Labs, the company behind the collections, said it was actively investigating the attack. However, there is no way to return the stolen assets, especially if scammers already sold pieces on secondary markets.
Unfortunately, the latest exploit is not the first BAYC would experience in the last few months. Hackers have specifically targeted Bored Ape Yacht Club holders due to the high value of the NFTs.
On April 25, a malicious actor hijacked BAYC’s official Instagram account and shared fraudulent links that enticed followers into sending over $2.7 million worth of NFTs.
A few weeks before that, the Discord channel of the collection was compromised with losses exceeding $100,000.
Crypto scams on the high
Reports have emerged that cryptocurrency is now becoming a haven for fraudsters. A new report from the Federal Trade Commission revealed that at least 46,000 people had lost over $1 billion to crypto scammers since 2021.
According to the report, published Friday, $680 million was approximately lost in 2021, while about $329 million was lost to these scams in Q1 2022. The average amount lost by each individual was about $2600, with most of the loot collected in Bitcoin.
The FTC also reported that 70% of crypto received by the scammers was in Bitcoin, with Tether as a distant second with 10% and Ether a close third with 9%.
Also, the FTC findings reveal that almost 50% of these losses started with interactions with fraudulent posts or messages on social media. The favoured platforms by these fraudulent actors include Instagram, Facebook, WhatsApp, and Telegram, with fraudulent investment schemes as the number one ploy used to rid people of their money, promising them unreasonably high profits in a short amount of time.
Notably, these latest findings reveal that losses to crypto scams have grown 60 times since 2018. The total amount lost to these internet fraudsters in crypto in Q1 2022 is already almost half as much as was lost in the whole of 2021.
However, the FTC estimates that those figures do not capture the full severity. For example, the FTC estimates in another paper that only 5% of people who lose their money to crypto fraud report to them. So there are thousands of other victims that they do not know about.
To avoid becoming victims of these scams, the FTC has urged investors firstly not to opt into investments guaranteeing returns, secondly, not to purchase crypto at the directives of another to protect their wealth, and lastly, not to take investment advice from an online love interest.
Cause of the scams
Scams and all sorts of fraudulent activities have made authorities, regulators alike come for the head of cryptocurrencies consistently.
Billy Markus, a co-founder of memecoin Dogecoin, tweeted on Friday to share his opinion on why the cryptocurrency sphere is full of scams.
Markus claims that the reason why scams often emerge in the crypto space is that the community is unable to control the space and clear it from scammers – “it does a horrible job of policing itself”.
“Instead of getting mad at scams, the space (crypto) enables scammers and defends the scammers, no matter how obvious it is, through chronic bad behaviour. It gets what it deserves.”
He goes further to say that the mentality of trying to scam others or getting other people scammed just because the person was once a victim is cancerous.
“I got scammed so I should scam others, This mentality is cancer.”
Another co-founder of DOGE, Jackson Palmer, also stated in an interview to the Sydney Morning Herald on Thursday that the cryptoverse is a “parasitic” technology that enables a great deal of scams frequently.
Palmer said that a load of people are attracted to crypto because it keeps promising easy gains and due to celebrity endorsements. He mentioned NFTs which have been promoted by celebrities but would have seemed laughable five years ago.
Conclusion
As non-fungible tokens become more popular, opportunists and scammers are increasingly opening up new ways to benefit at the community’s expense.
Any post or message related to surprise mints, giveaways, or outrageous returns on investments is a scam 99% of the time. Scammers are known to use fake giveaways and phishing websites to steal users’ data and then get access to wallets containing NFT pieces.
It is only necessary that all crypto community members stay alert to avoid falling prey to these attacks.
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