With an estimated $670 million worth of cryptocurrencies stolen by hackers and scammers, 2018 is on track to set a record as the worst year for the digital currency space in terms of assets lost, according to Crypto Aware.
Crypto Aware, a decentralized token investment management community, said the amount of stolen digital currencies so far this year represents nearly 40% of the total lost between 2011 and 2018. From 2011 to the first quarter of this year, scammers and hackers stole $1.7 billion worth of cryptocurrencies. The largest amount was recorded in the first three months of this year alone.
Crypto Aware founder Anna Wu commented for 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.”
According to CryptoAware, the biggest hacking incident in history was reported by Japanese-based cryptocurrency exchange Coincheck, which lost some 500 million NEM with an estimated value of over $530 million.
The exponential growth of Bitcoin and initial coin offerings (ICOs) saw the cryptocurrency market balloon from around $27 billion in April 2017 to more than $270 billion a year later. The market capitalization peaked at $823 billion early this year, and the spike in hacks and scams also jumped during the same time.
Wu went on to say:
“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 hacking industry rakes in $200 million a year
A separate study released in January by Autonomous Research showed that hackers had stolen $1.2 billion in Bitcoin and Ether in under ten years, their loot representing 14% of the entire cryptocurrency supply.
Autonomous Research fintech strategy director Lex Sokolin said:
“It looks like crypto hacking is a $200 million annual revenue industry.”
Internet giants against frauds
Social media giants have been revising their advertising policies to bar ICO- and cryptocurrency-related ads and thus protect their users from fraudulent and criminal activities.
Last week, social networking portal Twitter joined Facebook and Google in placing an embargo on ICOs and digital currency ads on its platform as part of a sweeping crackdown against scams and fraud.
On Monday, we reported that automated email service MailChimp also announced a move to ban all forms of advertisements about cryptocurrencies and ICOs.