Rising Crypto Scams Highlight Need for User Vigilance and Improved Security Measures
Summary:
As the crypto market heats up, users and projects are urged to stay vigilant of unreliable exchanges, unsecured DeFi protocols, and changing phishing scams. In January, cyber attacks resulted in more than $182.5 million stolen, an increase of 771% from January 2023. Eric Jardine from Chainalysis emphasized the importance of education and user awareness in securing cryptocurrency. The article then dissects how these scams operate, citing real-life incidents, and provides advice on how to avoid becoming a victim. Furthermore, it highlights the importance of diligently selecting secure, centralized exchanges, and comprehensive security efforts by DeFi protocols. The piece ends on a positive note, mentioning that losses from protocol hacks dropped about 64% year-on-year to $1.1 billion for 2023.
As the next bullish season in the world of cryptocurrency draws near, users and projects alike are warned to stay wary of unreliable exchanges, possibly unsafe decentralized finance (DeFi) protocols, and ever-changing phishing scams. Last January, 30 cyber attacks resulted in more than $182.5 million stolen, which is a staggering 771% rise compared to January 2023 and an almost 84% increase from December, as data from PeckShield reveals. February 2024 also proved to be a fruitful month for fraudsters, with over $380 million being taken — more than twice the figure of January. The largest heist was of $290 million from PlayDapp, followed by $26 million from FixedFloat and $9.7 million from Axie Infinity co-founder Jeff Zirlin.
Cybercrime research lead at Chainalysis, Eric Jardine, stated to Cointelegraph that knowledge is the primary protection in securing cryptocurrency. He urged users to remain constantly vigilant. He also noted that due to their open-source development, most cryptocurrency protocols enjoy the benefits of total transparency. Though this is an advantage for users wishing to examine the coding, it also offers unscrupulous elements a way to identify weak spots and plan possible exploits in advance.
A Scam Sniffer analysis indicated that in 2023, phishing scams affected over 324,000 cryptocurrency users, leading to losses of about $295 million. The anti-scam platform advised that social networking sites are often riddled with scam links, noting that malevolent websites are frequently advertised on these platforms. Beosin security researcher Pan Tao alerted users of several phishing scams pretending to be Ethereum staking and token airdrop events.
MicroStrategy’s account was targeted by hackers and $440,000 was stolen on February 25, under the guise of a scam token airdrop, with the attacker redirecting victims to a clone of MicroStrategy’s website. Scam Sniffer advised users to always check that the website URL is authentic from multiple sources and to completely understand what they're signing a transaction for.
Beosin's Pan Tao pointed out that new cryptocurrency users often purchase their first digital assets from a centralized exchange (CEX) owned by a single entity. However, several scams have occurred in the CEX area, including the stealing of customer funds by FTX and alleged fraudulent activity by JPEX with its users.
Jardine highlighted the importance of DeFi protocols' anticipating and addressing potential security threats both on and off the blockchain. He suggests that firms should craft systems to constantly scan for potential weaknesses. Finally, he pointed out that Chainalysis has observed advancements in DeFi protocol security practices, underscoring that losses from protocol hacks dropped approximately 64% year-on-year to $1.1 billion for 2023.
Published At
3/4/2024 1:56:42 AM
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