According to CypherTrace, cybercriminals carted away with $4.6 billion from cryptocurrency exchanges and users in this year alone. The Kraken $10 million hack that was made to look like a glitch at first, only for 1,200 bitcoins to go missing from the trading platform. The GateHub $10 million worth of Ripple hack, in which the hacker(s) involved compromised about 100 XRP ledger wallets. Yet, there are bigger scams that affected a lot of unsuspecting crypto holders, investors and traders.
The Gigi Brothers $100 Scam
Two Israeli brothers, Eli, 31 and Assaf, 21, got arrested in June, for the phishing scam they operated for three years, in which they stole $100 million. Their method involves creating fake websites to look like an established and trusted crypto exchanges. This is known as typosquatting. Then they will go to crypto forums to lure potential traders to the fake website.
The Scam That Affected 4,000 People
Five men and a woman were arrested in the Netherlands and the UK for a $27 million bitcoin scam. Their scam was so elaborate that it affected more than 4,000 people from 12 countries. Their scam method is also typosquatting. They created fake crypto exchange website to get access to the wallets of people who sign up.
Bitmarket is a crypto exchange located in Poland. On July 8, they announced that they were shutting down with immediate effect due to liquidity problems. This led to the loss of 2,300 bitcoins valued at around $23 million.
To make matters worse, both founders, Tobias Neimiro and Marcin Aszkiełowicz, when addressing the issue gave out contradicting statements. One of the founders, Tobias Neimiro, was later found dead from a gunshot wound.
PlusToken is a South Korean crypto wallet and exchange with two founders, a South Korean with the alias Kim Jung Um and a Russian called Leo. The app advertised an Ethereum-based token, PLUS, for users to invest in. They promised users who use the PlusToken wallet ROI from 8 – 16 percent per month with at least $500 deposit.
However, the app stopped functioning on June 20 as a result of ”technical difficulties”. While investigation is still ongoing, it appears that PlusToken was nothing but a Ponzi scheme that stole about $2.9 billion from unsuspecting investors.
The biggest scam in the cryptocurrency industry seems to still be ongoing. The US government have claimed that OneCoin scam is up to $4 billion, however, recent reports suggest that it is far more than that. Jamie Bartlett explained on his podcast show how OneCoin scammed British Muslims and a lot of people from about 175 countries all over the world. The number may be more than $19 billion.
The cryptocurrency industry lost $1.7 billion worth of cryptocurrencies in the first quarter of 2019 to cybercriminals, while only $1.2 billion was stolen in the whole of 2018. The difference is clear, so clear that 2019 has been tagged the year of ’Exit Scam’.