A loss of $1.4 billion in five months. Why people are left without cryptocurrency

In 2020, 98% of the lost funds were stolen through deception and fraud. We tell the main tricks of criminals and how to avoid serious financial losses

This year may become the second in history in the number of crimes in the field of cryptocurrencies. According to the analytical company Cipher Trace,from January to May 2020, more than $1.36 billion in digital money was lost as a result of theft, hacking and fraud. Most of the lost funds, 98% of the total amount, were lost due to deception and misappropriation.

In connection with the COVID-19 pandemic, a lot of phishing sites on this subject have appeared on the network, which trick cryptocurrency users or steal their personal data. The largest fraud scheme in 2020 was the Wotoken Ponzi scheme in China. Its participants were promised income through the use of non-existent trading software. More than 715,000 people were affected and lost more than $1 billion.

Every year, users are more attentive to the protection of their funds, and exchanges strengthen security systems. Therefore, the amount of stolen funds as a result of hacker attacks becomes smaller. Now criminals mostly put pressure on human psychology, promising high profits with minimum terms, efforts and investments.

Cryptocurrency handouts from celebrities

In early July, a website appeared on the network, looking like a portal Medium, where the official page of Elon Musk reports on the free distribution of cryptocurrency. Users were informed that Tesla gives bitcoin and Ethereum to all fans of the company.

On the site there are fake comments of the lucky ones who were able to get rich in this way. The scam is that users are offered to send 0.1 to 20 BTC or 1 to 100 ETH to a certain address to get back twice as much. Of course, criminals do not send anything in return.

Such a scheme has long been common in the crypto industry, and Elon Musk - one of the most favorite figures for criminals. However, scammers can use the name and image of any character known in the blockchain community. For example, in March this year, a YouTube channel was launched on behalf of Ripple head Brad Garlinghouse. There was published his real interview, and in the description of the video users were offered to send to a certain address from 2 to 500,000. XRP to get in return from 20,000. up to 5 million coins.

How to protect yourself:

It is easy to save your coins: in fact, in this way no one hands out cryptocurrency for free, even the richest and most famous. In order to reinforce this idea in the heads of crypto-enthusiasts, Ethereum creator Vitalik Buterin even added the phrase "Not giving away ETH" to his nickname on Twitter, which means "don't give the airwaves".

The scheme has been in operation for several years and always looks the same: a celebrity in honor of any event gives everyone a cryptocurrency. Users only need to send some of their coins to a specific address.

Financial Pyramids

For the second year in a row, the main amount of money that users lose is in the financial pyramids. This year, as we said earlier, Wotoken is leading, which has raised over $1 billion from more than 715,000. Investors.

OneCoin continues to lead the list of Ponzi schemes. According to various estimates, the scammers attracted from $4 billion to $15 billion in cryptocurrency.

On July 8, 2020, a U.S. court was to sentence one of the founders of the pyramid, Konstantin Ignatov. However, the prosecutor asked for the hearing to be adjourned for four months, as the defendant was assisting the prosecution and that cooperation had not yet been completed. Ignatov faces up to 90 years in prison.

How to protect yourself:

All financial pyramids have certain properties on which fraud can be recognized. For example, if the user is offered to make money by attracting other investors. Also, almost always the organizers of such schemes promise participants a high profit, if they will contribute funds or invite new participants. The latter is given a similar task.

All profits that early investors receive are generated by late investments. As a rule, the organizers take most of the funds, the rest of the participants are left with nothing.


Phishing sites

Phishing sites are used by criminals to steal sensitive user data. For example, it can be a fake front page of the exchange, which is almost impossible to distinguish from the real one. Once the user tries to log in to their account and enters the login and password, the data will be in the hands of the attackers. Sometimes criminals use different symbols similar to the letters of the Latin alphabet, so that even rereading the address of the site, the user found it difficult to notice the substitution.

In June 2020, a copy of Privnote was discovered online. It does not encrypt messages that change in such a way as to replace bitcoin addresses. To do this, a special script is used that changes the sender's wallet to the address of criminals.

After reading the message is deleted, the victim cannot verify which bitcoin address was in it. The only difference between a phishing page that has long hung in the top of Google's ad-giving rights is the "s" at the end of the title, that is Privnotes, not Privnote.

How to protect yourself:

You should always check the address bar very carefully. It is possible to enter the address with your hands. Even a small difference in writing suggests that the site is a fake. You also need to check the functionality of the page - often on phishing sites only a window for entering a login and password. Or, for example, clicking on one of the tabs, you may find yourself on a page that does not look like the original resource.

SIM swapping

In February 2020, an unknown person changed the SIM card of a Muscovite and stole more than 700 rubles from him. In bitcoin. According to law enforcement agencies, then the attacker transferred and sold the cryptocurrency with the help of a trading Telegram bot.

At the end of last year, in the same way, 19-year-old Yousef Selassie was able to steal digital money worth more than $1 million, as well as data of 75 people. To do this, the teen cloned the victims' phone numbers to gain access to their email accounts and trading accounts.

Here's how the scheme works. First, criminals learn the phone number and personal data of the user through open sources or employees of operators, then block the SIM card (it is enough to contact the support service and report the loss of the "sim"). The attackers then seek to transfer the number to their SIM card and gain access to the account.

How to protect yourself:

To protect against SIM swaps, you need to issue a separate SIM card to register accounts on exchanges and wallets. Such a phone should not be used in everyday life. It does not need to be published anywhere and reported to anyone. You can also set an additional password for a SIM card. In this case, it will not only be necessary to block the number.

You can also use special programs for two-factor authentication, not your phone number. Now such a feature is available on most crypto exchanges.