Here's how much cryptocurrency scammers are making by ripping off 'greedy' investors
- Exclusive Crypto Aware data: $1.7 billion-worth of cryptocurrencies lost to hacks and scams between 2011 and 2018.
- Forty percent of all crypto thefts by value have been in the first three months of the year.
- Spike in incidents due to the huge growth of cryptocurrency market over the last year.
LONDON - Investors have lost $670 million of cryptocurrencies in hacks and scams over the last three months, according to data shared with Business Insider.
Notable losses since the start of the year include the $400 million hack of Japanese cryptocurrency exchange Coincheck in January and a $170 million hack of cryptocurrency exchange BitGrail in February.Anna Wu, the founder of Crypto Aware, told Business Insider: "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."
The total size of the cryptocurrency market rose from around $27 billion in April 2017 to close to $270 billion as of Tuesday. The market exploded thanks to the rise of bitcoin against the dollar and the new trend of "initial coin offerings" (ICOs), where startups issue their own digital coins to fund their businesses. Startups raised $5.6 billion through ICOs in 2017.Wu said: "Cryptocurrency frauds, scams, and hacks tend to rise every time there is considerable upward momentum in pricing for cryptocurrency market, so be extra cautious when the market is bullish."Crypto Aware's figures highlight the risks associated with the volatile and unregulated market. Many investors store their crypto centrally on exchanges and these large holdings make them an attractive target for hackers.
Scammers have also fraudulently raised millions from unknowing investors, such as Chinese Ponzi scheme "Asian-European Currency" which was shut down by police in early 2017.
Wu told BI that investors shouldn't invest more than they can afford to lose and should inspect URLs closely."Phishing scams are by far the most popular type of scams and you can easily avoid them by checking the website address against the officially published URLs character by character," she said.
Wu 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."
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