The second quarter of the year did not start well for crypto investors, as CertiK reports that over…
The second quarter of the year did not start well for crypto investors, as CertiK reports that over $103.6 million was stolen by crypto scammers in April.
Over the years, the crypto industry has been in a constant standoff with attacks from scammers. In the first quarter of the year, cybercriminals acquired $452 million, DeFi Security reported.
Though considered a positive stat compared to the $1.3 billion recorded in the first quarter of 2022, the battle is far from being won. CertiK’s latest report proves that much is needed to protect the industry from scammers.
As the industry explores ways to stop this rampage, experts warn sternly that acting with caution and vigilance is important when interacting with the crypto ecosystem.
Reports claim that the primary victims of this crime are investors who can provide thousands of dollars effortlessly. While it is impossible to steal thousands of dollars from a traditional financial institution without being caught, such theft is possible within the cryptocurrency ecosystem due to the peculiarities of the space, one of which is the anonymity of transactions.
Due to the anonymity of transactions, tracing stolen funds is difficult and almost impossible. The result of these scourging happenings, together with the market’s worrisome volatility, is investors’ lack of interest in the space. As reported by CertiK, the two most common types of scams used to extract the most funds are exit scams and flash loans.
Exit Scams
Exit scams involve convincing-looking firms that continue to accept payments for whatever product or service they are selling while abandoning previously accepted orders or requests. Exit scams, often known as ‘confidence tricks,’ were used to steal $9.3 million from the crypto sector in April 2023.
Flash Loans
On the other hand, Flash loans contributed more to the scammers and hackers in these instances of theft. According to CertiK, cybercriminals stole $19.8 million by promoting unlimited borrowing of uncollateralized loans. In this manner, lenders who require fast loans borrow and repay funds in the same transaction, depleting the victims’ accounts.
The April 3rd exploit of several trading bots resulted in a $25.4 million loss. Later, $22 million was lost in the Bitrue hot wallet plunder, and $13 million was stolen from South Korea’s GDAC exchange.
Some of the top Crypto thefts of April 2023
Some KuCoin exchange users collectively lost over $22,000 after the exchange’s Twitter account was briefly hacked on April 24.
Criminal activity by cryptocurrency scammers has also increased in India. After hacking News24’s Twitter account in March, hackers promoted a phony Ripple (XRP) stablecoin airdrop event in India. These messages also displayed fraudulent links for unaware individuals to click on, potentially exposing them to financial hazards.
Because of the global growth of cryptocurrencies, the perpetration of all scams has become a global issue. Cybercriminals have used a variety of strategies, and the anonymity of blockchain technology allows many crooks to get away with such scams. These cybercriminals have focused on the sector, mostly due to its unregulated nature.
It is critical to take preventative measures to avoid becoming a victim of a cryptocurrency scam. As the ecosystem grows in size and complexity, it will probably remain a prime target for scammers. Traders and investors will be able to recognize frauds early and avoid falling victim if they grasp the main methods scammers use to steal information and, eventually, money.