- Certik report shows that the crypto industry has lost 4997 million to crypto attacks and scams.
- In August alone, the industry lost more than $45 million, most of which was to exit scams.
- FBI warn the public of spyware, false job advertisements, and social media impersonation as new crypto fraud strategies.
A report shared by blockchain security firm CertiK shows that users in the crypto industry have lost $997 million to malicious actors year-to-date (YTD). In the month of August alone, the report shows that users lost about $45.8 million due to crypto-related attacks, exploits, hacks, and scams.
According to the report, $26 million of the $45 million were lost to exit scams in the crypto space. An additional $6.4 million were lost through flash loans which are a relatively new form of uncollateralized lending in the DeFi space.
Exploits, which include vulnerabilities in smart contracts and other blockchain technologies, made up the remaining $13.5 million.
CertiK noted that in August, the crypto community suffered 36 cybercriminal incidents, some of which led to significant losses. Of these, CertiK highlighted the Zunami Protocol attack, which cost $2.2 million in losses, and the Exactly Protocol exploit, which cost $7.3 million. More significant was the PEPE withdrawal incident, which led to $13.2 million in losses.
Even while the losses in August were substantial, they were far less than the losses sustained in July. De.Fi, a Web3 data outlet, reported losses totaling about $486 million in July 2023, with the Multichain attack accounting for about $231 million of those losses.
This in addition to other factors led to Multichain winding down operations on July 14. According to the team, the crypto company lacked funding to continue operations. They also cited a lack of alternative sources of information as one of the reasons for its shutdown. The team was reportedly unable to contact the CEO after he was taken into custody by Chinese authorities.
Of the $997 million lost this year, CertiK stated that more than $596 million was lost to exploits. An additional $137 million was lost to exit scams, while more than $261 million has been lost to flash loan attacks this year. Flash loans have become a more common occurrence in 2023 with March recording the highest number of these attacks leading to about $200 million in losses.
Rising Crypto Fraud Threatens the $2 Trillion Market
This report comes at a time when, according to data from CoinMarketCap, the market capitalization of all cryptocurrencies has surpassed $1.2 trillion. The rising losses show that the market’s expansion also increases the appeal of illegal activity.
To reduce their occurrence, regulatory agencies including the Commodity Futures Trading Commission (CFTC) and the U.S. Securities and Exchange Commission (SEC) have stepped up their attempts to crack down on crimes associated with cryptocurrencies. However, the statistics imply that additional steps must be taken to protect this developing financial ecosystem.
Hacks and Web3 exploits are not the only types of crypto fraud currently plaguing the industry. According to recent reports from the Federal Bureau of Investigation (FBI), con artists now use a variety of strategies to influence their victims. Their well-known tactics include spyware, false job advertisements, and social media impersonation.
Some of these bogus jobs, according to the FBI’s observation, convince victims to engage in cryptocurrency fraud. Additionally, the victims of these schemes frequently endure cruel treatment. The FBI cautioned job applicants to avoid applying for positions with extremely generous salaries or benefits.