It goes without saying that the crypto market is booming and cybercriminals are interested in cashing in. While Bitcoin may not have managed to sustain the $19,000 price tag that it achieved in the previous years, but it has spawned a huge variety of altcoins and stable coins, which include Ripple, Ethereum, Bitcoin Cash, Monero and Litecoin. These have managed to maintain constant trade and a loyal following. It is a given that with any form of asset that carries a financial value, criminals will be in search of ways to profit fraudulently and cryptocurrency is no different. In fact, it is a rather unregulated industry due to which investing in it can be a risk.
2019 seems to have been quite a big year for criminals and fraudsters, especially in the crypto industry. According to reports, a total of $4.26 billion has been stolen in total from crypto investors, exchanges and users. Like any other heist, a crypto hack can only be considered a success when the perpetrators are able to make a clean getaway. This means that they have to steal crypto from unsuspecting users, launder the money, avoid being caught by the long arm of law enforcement and find a way out so they can spend the currency they have gotten in the real world.
However, things don’t always turn out that way. Crypto scams are quite common, especially those involving Bitcoin, but not all manage to get away. Xtrgatereview Highlighted here are some of the worst crypto catastrophes and Bitcoin scams 2019:
- New Zealand-based crypto exchange, Cryptopiawent offline due to a hack. The firm suspended trading and went into liquidation. Users didn’t have individual wallets and a loss of $16 million was ascertained via estimates.
- Peer-to-peer crypto market platform called LocalBitcoins was attacked and customers had their Bitcoin stolen.
- 26 forms of cryptocurrencies had security issues in regard to Proof of Stake, which opened them up to ‘Fake Stake’ attacks, crashed blockchains and gave hackers the opportunity to control them.
- A man in the United Kingdom was arrested by Europol on suspicion of stealing IOTA crypto of about 10 million euros.
- Hashed passwords and 450 email addresses of Coinmama’s users were put up for sale on the Dark Web.
- Bithumb reported their third security incident in two years. As per estimates, the cybercriminals made away with Ripple and EOS tokens worth $20 million.
- Cyberattacks were made on two cryptocurrency exchanges i.e. CoinBene and DragonEx, with a $45 million loss for the former and $1 million loss for the latter.
- The Binance cryptocurrency exchange platform was compromised by hackers and they stole Bitcoin worth $41 million, one of the most prominent Bitcoin scams 2019. Since then, the crypto exchange has had to deal with rumors regarding raids in China, but these have been vehemently denied by the company.
- The European police seized Bestmixer.io as it is believed that the online service laundered money in cryptocurrency worth $200 million over the years. This made it far more difficult for law enforcement agencies to track coins that were believed to be a result of criminal activities or stolen.
- GateHub was the target and approximately 18,473 customers had their ledger wallets compromised. They detected suspicious API calls and an investigation was conducted. It revealed that a database containing valid access tokens had been accessed by the attackers. They still haven’t clarified as to how many coins were stolen, but estimates suggest that they lost about $10 million.
- 2.5 million inCardano (ADA) and 9.3 million in Ripple (XRP) were stolen from the hot wallet of Bitrue, a Singaporean crypto exchange. There was a vulnerability in the review process systems that was exploited by the hacker for stealing customer funds.
- The Europol and Eurojust made six arrests in the Netherlands and the United Kingdom. It was alleged that the suspects had operated a crypto scam that had netted them Bitcoin worth €24 million.
- CipherTrace conducted an investigation, which revealed that a hacker was responsible for Kraken’s Bitcoin flash crash. It had caused the price of Bitcoin to go from $8,400 to $75 rather abruptly. However, the cost had settled down soon after due to which many disregarded it as a glitch in their network. But, CipherTrace disclosed that it was rather an ingenious way of laundering money. A whale account had been compromised by the hacker and they had stolen 1,200 Bitcoins that has a value of $10 million.
Bitpoint, a crypto exchange based in Japan, suffered from a theft of crypto worth $32 million of which $23 million belonged to the customers of the organization.
- The DoJarrested and charged two cryptocurrency consultants on claims of attempting to extort an Ethereum startup. The pair had threatened to destroy the business unless they were paid what they demanded.
- Best known for his attack on TalkTalk, a hacker was also indicted for an attack in 2017 on EtherDelta, a crypto exchange.
- According to MapleChange, a Canandian crypto trading post, they had suffered from a theft of 900 Bitcoin (BTC). The website said that they would not be refunding the customers. It didn’t take long after that for the company’s social media presence and their website to vanish completely. There is suspicion of foul play.
- Telegram scammers were blamed by Satowalletfor the loss of $1 million, which had been stolen from their customers’ wallets. There is suspicion of an exit scam.
- Upbit, the South Korean cryptocurrency exchange, stated that their company’s hot wallet had been compromised as 342,000 Ethereum (ETH) had been stolen, which was worth $48.5 million. The exchange reassured its customers that they would not be affected and that Upbit assets would cover the lost funds.
- A malicious Official Linux CLI binary was delivered when Monero’s official website was compromised. This resulted in tampering for stealing funds from unsuspecting users.
- Even though this South Korean cryptocurrency exchange had only been operating for a couple of months, PureBitallegedly conducted an exit scam. The exchange made away with Ethereum that had a market value of $3 million.
- Virgil Griffith, a cryptocurrency expert and Ethereum project manager, was arrested after he had given a talk at a technology talk in North Korea. In this talk, he had talked about how blockchain could be used for circumventing sanctions. If he is found guilty of breaking the law of United States, he could be sentenced for 20 years in prison.
- Two men were charged by the DoJ for allegedly carrying out SIM-swapping attacks for the purpose of stealing cryptocurrencies in high value amounts. According to allegations, they managed to steal approximately $550,000 in cryptocurrency from known victims. They managed to do so by hijacking their phone numbers in order to gain access to their wallets.
- An exit scam was allegedly performed by PlusToken, which walked away with a staggering amount of $2.9 million in deposits it had collected from its customers. Some people who are suspected of being involved in this scam have been arrested.
- 10 people were arrested by the Taiwanese police in connection with an alleged Ponzi scheme that involved Financial.org, a British company. The company is said to have taken hundreds of thousands of dollars from investors all over Asia for investing on their behalf. However, the company did not have the license to engage in financial transactions. It was said that they had collected $1 billion from investors all over Asia and had promised then returns of 8% per month.
- In December 2018, a 51% attack had been conducted on Vertcoin and history repeated itself exactly a year later. This attack in December 2019 resulted in the removal of 603 blocks from the VTC chain. These were replaced by 553 attacker blocks that were put in place for performing double spending.
- Three Ponzi cryptocurrency scam operators were arrested by the DoJ. It was alleged that the trio had used the funds of their investors for living luxurious lifestyles instead of spending them on mining equipment, as promised. These men had fleeced investors for $722 million.
- Shopin had promised to provide users with a shopper profile solution based on the blockchain. However, its founder was arrested and charged for operating an ICO worth $42 million without actually registering with the Securities and Exchange Commission (SEC). The proceeds from the ICO were spent on shopping, entertainment, rent and dating.
- A new ‘process hollowing’ technique was documented by researchers that is being used for burying cryptocurrency miners on your personal computers.
- The sudden passing away of Quadringa’s CEO resulted in a loss of $250 million in investor funds because he had the credentials that were needed for accessing it. The legal team representing the victims who owned the digital assets have requested proof of Quadringa’s death, which can be provided by exhuming the body.
These are some of the biggest Bitcoin scams 2019 and that of other cryptocurrencies that have seen investors lose millions of dollars. This can come as a big shock, particularly when they are unable to recover their investment. Obviously, you don’t want to fall in the same boat and the best way to ensure it doesn’t happen is to take some steps for mitigating the risks. This includes only choosing reputable crypto exchanges for trading Bitcoin and other cryptocurrencies. Make sure you check their security measures. Always choose 2-factor authentication for added security. You should also be careful when investing in a cryptocurrency as not all of them are authentic and some are just Ponzi schemes looking to take advantage. Select good and renowned wallets for storing cryptocurrencies to minimize chances of theft.