Top cryptocurrency scams of 2019 — and how most hackers got away with it

The top cryptocurrency scams of 2019MaxPixel


  • This year cyber criminals were able to siphon away $4.26 billion from cryptocurrency users and exchanges.
  • One of the biggest scams was the hacking of BITPoint, a Japanese cryptocurrency exchange, who lost $30 million.
  • Hackers are also suspected to be behind the Kraken Bitcoin Flash Crash though the perpetrators are still at large.
2019 has been a big year for fraudsters and cyber criminals. Stealing from cryptocurrency exchanges and the misappropriation of funds has led to a total loss of $4.26 billion this year, according to a report by CipherTrace.

Like any heist, pulling off a successful scam in only part of the story. A truly successful cryptocurrency hack is when the thieves can steal the money and also make a clean getaway.

That means stealing cryptocurrency from unsuspecting users, avoiding the long arm of law enforcement, laundering that money and finding an exit so that the hackers can actually spend it in the real world.

But, that’s not how it always plays out.

Here are some of the biggest cryptocurrency scams on 2019:
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Japanese Exchange BITPoint Hacked for $30 million

Japanese Exchange BITPoint Hacked for $30 million

Japanese cryptocurrency exchange BITpoint, was hacked in July. It lost a grand total of $30 million in July. The company lost $28 million in customer funds from the platform in Japan and another $2 million from exchanges using BITPoint outside Japan.

Among the stolen financial assets were Bitcoin, XRP, Ether, Litecoin and Bitcoin cash.

The Japanese Financial Services Agencies (FSA) found that BITpoint has no risk management system in place or any kind of user protection. They gave the have giving cryptocurrency exchange time till 2020, to submit an improvement plan, to show that they can change this state of affairs that .

Asahi Shimbun, the president of BITPoint, announced that he will reimburse all customers that were affected by the scam

Hackers Steal $40 Million in Crypto from Binance

Hackers Steal $40 Million in Crypto from Binance

Binance, the world’s leading cryptocurrency exchange, lost bitcoins worth $40 million in May.

Hackers used API keys, two factor authentication and other personal information to gain access to the financial assets, according to CipherTrace researchers. They added that a lot of these accounts were ‘very high net worth accounts’.

Binance was eventually able to stop the hackers but only after they had already made off with $40 million.

Instead of using customer funds to cover the losses, Binance decided to use its self-insurance fund called SAFU — it collects 10% of all the trading fees that happen on the platform in separate wallet.

​Two Israeli Brothers Steal Tens of Millions in Typosquatting Scam

​Two Israeli Brothers Steal Tens of Millions in Typosquatting Scam

The same Israeli brothers who are allegedly responsible for the Bitfinex hack that happened in 2016 also stole tens of millions in cryptocurrency using a ‘typosquatting’ phishing scam that extended for three years.

‘Typosquatting’ is when user when users think they’re logging on to the official site but instead are directed to fake sites meant to mirror cryptocurrency exchanges and wallets.

In this case, users logged in using the fake site which gave their login details and access keys to the hackers. Over tens of million of dollars of cryptocurrency were stolen before the brothers were finally caught in June.

​Six Arrested in UK and Netherlands over $27 million Typosquatting Scam

​Six Arrested in UK and Netherlands over $27 million Typosquatting Scam

Another typosquatting scam was uncovered just a few days after the Israeli brothers were arrested. Six people used typosquatting to steal nearly $27 billion in cryptocurrency from over 4,000 users spread out over 12 countries.

They were finally caught by the UK South West Regional Cyber Crime Unit (SW RCCU), who partnered with the Dutch Police and the National Crime Agency (NCA), in a joint operation to take the hackers down.

​Hack Suspected as Cause of Kraken Bitcoin Flash Crash

​Hack Suspected as Cause of Kraken Bitcoin Flash Crash

Kraken, a major Bitcoin trading platform, witnessed a drop from $11,200 in Canadian Dollars to $100 within a few moments.

Initially, the fluctuation was thought to be a glitch in the system but CipherTrace’s analysis reveals that it was just a clever hack — the hackers knew what they were looking for and knew which whale account to empty.

The account they hacked contained 1200 bitcoins worth $10.45 million and dumped the Bitcoin into a highly illiquid market. But only after they have placed buy orders at $100 to that that they should pick the same Bitcoins at the bottom of their engineered ‘crash’.

​$10 Million in XRP Stolen from GateHub

​$10 Million in XRP Stolen from GateHub

Hackers breaking into GateHub were able to make off with 23.2 million XRP from over 103 users. CipherTrace assesses that while cryptocurrency was only stolen from a small number of accounts, a total of 18,000 accounts were compromised.

GateHub is still looking into how the hackers were able to gain access to the sensitive information required to login but believe that it had something to do with exploiting the system’s API.

All the wallet holders were contacted and over 500,000 XRP has been recovered so far.

​Singapore Exchange Bitrue Hacked for over $4 million

​Singapore Exchange Bitrue Hacked for over $4 million

Bitrue, a cryptocurrency exchange based out of Singapore, lost $4.2 million in user assets divided between 9.3 million XRP and 2.5 million ADA.

Hackers were able to break through the exchange’s security by exploiting a vulnerability in the ‘Risk Control team’s second review process’, according to the company.

Bitrue has also stated that it will be returning the lost funds to its users and revising its security measures.

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