August 23, 2017, 10:32 PM EDT August 24, 2017, 8:36 AM EDT
Heres another reason to be leery of the initial coin offerings being done at a staggering pace in the cryptocurrency world: theres a one-in-10 chance youll end up a victim of theft.
Phishing scams have helped push up criminal losses to about $225 million this year, according to Chainalysis, a New York-based firm that analyzes transactions and provides anti-money laundering software. In such scams, investors are tricked into sending money to internet addresses pretending to be funding sites for digital token offerings related to the ethereum blockchain technology.
More than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds this year, Chainalysis estimates.
Its a huge amount of money to generate in such a short period of time, said Jonathan Levin, co-founder of Chainalysis, whose software and database are used by some of the largest bitcoin companies and U.S. law enforcement agencies. The cryptocurrency phishers are doing pretty good against all the other types of criminals that are out there.
Indeed, the huge amount of wealth that has fallen prey to cyber criminals is approaching the losses incurred by robberies in the U.S. for the entire year of 2015, which stood at $390 million, according to statistics released by the Federal Bureau of Investigation.
ICOs are digital token sales typically that raise ether, with users transferring the funds to addresses provided by startups. Investors, sometimes eager to get early access to new token offerings have been tricked into providing their credentials to fake websites through targeted email campaigns, twitter posts and Slack messages, said Levin.
Read more about an Ethereum co-founders views on ICOs
Ether rose 0.3 percent to $324.92 on Thursday, according to data from coindesk, while bitcoin rose 0.4 percent to $4,151.47.
Most attacks involve creating websites or social media accounts that sound similar to the real ICO project. Levin gave the fictional example of a project named “illuminate,” which an imposter might fake by spelling it as “iIIuminate.” Using the fake account, they would solicit potential investors to send money to the criminals address.
His firm compiled the data by identifying so-called digital wallets used by scam artists. That information is usually public because criminals widely circulate it, hoping to fool investors into sending them money.
Other common forms of crime involve tapping into project loopholes. The DAO, or decentralized autonomous organization, is a smart contract project built on top of ethereum that was intended to democratize how ethereum projects are funded. A bug in the system was exploited and that led to the theft of $55 million worth of ether at the time.
Read more on how tech startups are ditching venture capital for ICOs
Levin didnt provide data for bitcoin-related cybercrime, and not because it is any safer. He said such data is harder to track as scams are usually specific attacks on individual holders, rather than ICO-related campaigns which try to dupe many people at once.
The overall figures mean there are infrastructure that we need to build to help prevent people from getting abused, said Levin.
- Hundreds of Millions in Cryptocurrency Vanishes After ... - March 11th, 2019
- Fidelity's new cryptocurrency company is up and running ... - March 9th, 2019
- JPMorgan is creating its own cryptocurrency - CNN - March 6th, 2019
- Cryptocurrency Exchange Says It Can't Access $190 Million ... - February 5th, 2019
- What's the Best Cryptocurrency to Invest in Today? - January 9th, 2019
- Cryptocurrency Trading Easy tips to get started | AvaTrade - January 9th, 2019
- Thailand Issues 4 Cryptocurrency Licenses, Rejects 2 ... - January 9th, 2019
- NASDAQ, Fidelity Invest in New Cryptocurrency Exchange ... - January 9th, 2019
- Cryptocurrency News | Cryptocurrency News | Blockchain ... - January 9th, 2019
- Differences Between Cryptocurrency Coins and Tokens - January 9th, 2019
- Cryptocurrency Charts - January 8th, 2019
- What is cryptocurrency? - cointelegraph.com - January 4th, 2019
- Blockchain Will Survive A Cryptocurrency Apocalypse - January 1st, 2019
- Cryptocurrency - Simple English Wikipedia, the free encyclopedia - December 25th, 2018
- Is Cryptocurrency Dead for Good? | Investopedia - December 6th, 2018
- Cryptocurrency scammers dupe Singaporeans out of $78,000 in ... - December 6th, 2018
- Invest in Cryptocurrency With Spare Change - Black Enterprise - November 28th, 2018
- What is Mining Cryptocurrency? What you need to know... - November 26th, 2018
- Saudi Arabia Will Launch Its Own Cryptocurrency in 2019 ... - November 23rd, 2018
- Bitcoin and Other Cryptocurrency Prices Are Crashing Again ... - November 17th, 2018
- Homepage - Cryptocurrency Army - November 14th, 2018
- Cryptocurrency - Simple English Wikipedia, the free ... - November 14th, 2018
- How To Create Your Own Cryptocurrency - fastcompany.com - November 14th, 2018
- Cryptocurrency price plunge worse than bursting of dotcom ... - September 18th, 2018
- Iran, North Korea and Venezuela turning to cryptocurrency ... - September 12th, 2018
- SEC halts trading in two cryptocurrency products, citing ... - September 12th, 2018
- Cryptocurrency News, ICO Reviews & Blockchain Updates ... - September 9th, 2018
- Cryptocurrency "miners," utilities look for ways to get along ... - August 29th, 2018
- Cryptocurrency: Virtual money, real power, and the fight ... - August 28th, 2018
- Pornhub Now Accepts PumaPay Cryptocurrency - August 27th, 2018
- NK hackers target Mac users with trojan cryptocurrency app ... - August 27th, 2018
- Cryptocurrency: The unlucky investors who got in at the wrong ... - August 26th, 2018
- cryptocurrency coins Archives - The Industry Spread - August 26th, 2018
- cryptocurrency Archives - Page 6 of 6 - The Industry Spread - August 26th, 2018
- Cryptocurrency investment in SMSF - hallandwilcox.com.au - August 26th, 2018
- How To Choose The Best Cryptocurrency Wallet - Crypto News AU - August 26th, 2018
- Courses | Cryptocurrency Australia - August 26th, 2018
- What Every Investor Should Know Before Buying Cryptocurrency ... - August 26th, 2018
- The biggest cryptocurrency hack in the history of blockchain - August 26th, 2018
- After the Bitcoin Boom: Hard Lessons for Cryptocurrency ... - August 21st, 2018
- Cryptocurrency Rankings | CryptoSlate - August 14th, 2018
- Bitcoin price falls after SEC postpones key ETF decision - August 12th, 2018
- Brokers Cryptocurrency Deals Are Focus of SEC Review ... - August 7th, 2018
- 7 Cryptocurrency Predictions for the Rest of 2018 - August 7th, 2018
- Have a Cryptocurrency Company? Bermuda, Malta or Gibraltar ... - July 31st, 2018
- Bitcoin price live: Latest updates as cryptocurrency ... - July 22nd, 2018
- 2018 Bahamas Blockchain & Cryptocurrency Conference - July 16th, 2018
- Best Cryptocurrency Trading Platform 2018 | Top Crypto ... - July 13th, 2018
- Cryptocurrency: Advantages And Disadvantages Explained - July 12th, 2018
- ATB Coin - The fastest and most secure payment system - June 19th, 2018
- An Illustrated Glossary of Cryptocurrency Slang (Infographic) - June 19th, 2018
- Apollo All-in-One Cryptocurrency - June 3rd, 2018
- Cryptocurrency News, ICO Database, Coin Rankings and ... - May 25th, 2018
- CoinLib - Cryptocurrency prices now - May 21st, 2018
- Cryptocurrency Market Capitalizations | CoinMarketCap - May 4th, 2018
- CryptoCurrency Market , Coin Prices & Charts, Crypto ... - April 28th, 2018
- Nasdaq open to cryptocurrency exchange in future, says CEO - April 27th, 2018
- The 4 Top Cryptocurrency Mining Stocks -- The Motley Fool - April 27th, 2018
- One in five financial institutions consider cryptocurrency ... - April 27th, 2018
- New hacks siphon private cryptocurrency keys from ... - April 27th, 2018
- What Is Cryptocurrency? - dummies - April 21st, 2018
- Cryptocurrency Market Surges to $365 Billion, Start of a ... - April 21st, 2018
- BTCMANAGER | Bitcoin, Blockchain & Cryptocurrency News - April 16th, 2018
- How to keep your cryptocurrency safe - CNET - April 11th, 2018
- How do I report Cryptocurrency Mining income? - TurboTax ... - April 4th, 2018
- When do you report Cryptocurrency investments? - TurboTax ... - April 4th, 2018
- Trading Cryptocurrency in 2018: The Definitive Guide - March 14th, 2018
- How would one operate a Cryptocurrency Mining Pool and ... - March 13th, 2018
- Coinbase cryptocurrency index fund - Business Insider - March 10th, 2018
- Cryptosomniac | Cryptocurrency Price Tracker - Bitcoin & Eth ... - February 24th, 2018
- Cryptocurrencies News & Prices | Markets Insider - February 22nd, 2018
- I started cryptocurrency mining at the end of 2017 and was ... - February 20th, 2018
- Cryptocurrency News - Bitcoin, Ethereum, NEO, ICO startups - February 8th, 2018
- 7 Best Cryptocurrency Exchanges to Buy/Sell Any ... - February 8th, 2018
- Electroneum. The Mobile Cryptocurrency. - February 8th, 2018
- Cryptocurrencies trading | your guide in the world of trading ... - February 5th, 2018
- Robinhood trading app introduces cryptocurrency - money.cnn.com - January 28th, 2018
- Robinhood adds zero-fee cryptocurrency trading and tracking ... - January 28th, 2018
- Cryptocurrency Price Prediction, Comparison, Analysis - January 22nd, 2018
- South Korea's major cryptocurrency exchanges ... - reuters.com - January 13th, 2018