Ah, the world of cryptocurrencies – a delightful blend of innovation and chaos! As these digital wonders continue to captivate the business and economic landscapes, one can’t help but marvel at their ability to stir up both excitement and trepidation.
Cybercrime continues to thrive as fraudsters and scammers exploit weak or non-existent security measures, lack of regulations, and government oversight. Since scams follow where big money is and fraud and deceit are anxious for your money, our article exposes the top 10 crypto frauds in 2023.
GDAC
Seoul-based cryptocurrency exchange GDAC announced last April their systems had been hacked. Fraudsters managed to infiltrate the GDAC hot wallet, where they stored several cryptocurrencies, including Bitcoin, Ethereum, Tether, and WEMIX tokens. During the incident, the scammers made away with over 61 Bitcoins, creating a deficit of at least $13 million, about 13% of the exchange’s total crypto asset holdings.
Read more: Bitcoin Bosses: The Fab 5 Who Rule the Crypto Jungle!
The Bitrue Exchange Heist
Popular cryptocurrency exchange Bitrue suffered a massive hack last April, and fraudsters spirited away over $23 million worth of Ethereum, Gala, and other prominent cryptocurrencies. According to the firm’s official statement, cybercriminals managed to steal the funds after hacking the exchange’s hot wallet, specifically exploiting one of their four hot wallets containing over 5% of their total asset holdings.
The Crypto Whale Mystery
Some frauds are so well conducted that it would be stupid not to be deceived by them. Consider the April 2023 mysterious hacking incident targeting crypto whales and pioneer investors siphoned a whopping $10 million from different accounts across at least 11 blockchains, for example. The hackers, who mainly targeted Ethereum (ETH), targeted high net-worth investors with massive crypto holdings and exploited inherent weaknesses associated with open-source multi-sig contracts they use to secure their holdings. The hackers managed to access users’ private keys and drained their crypto wallets using systems still shrouded in mystery.
Deus Finance
Decentralize finance (DeFi) platform Deus Finance joins our list of the biggest losers to crypto scammers who made away with over $6 million. The 5th May incident involved an attack that targeted stablecoin DEI. The fraudsters initiated their attack on the BNB Smart Chain (BSC) before focusing their guns on the Arbitum blockchain, where they inflicted a $5 million loss on the ARB/ETH deployment. According to the DeFi protocol, the breach was caused by an implementation error in the DEI token contract. This would be the second time Deus Finance is suffering a similar attack since there was a similar exploit in March 2022 where over $3 million in Ether and Dai was lost.
Trust Wallet’s Social Engineering Hack
Cybercriminals recently stole over $4 million belonging to Trust Wallet users using social engineering tactics to bypass security measures. The fraudsters convinced users to reveal sensitive personal information, which they then used to steal from their wallets. Since fraud is the daughter of greed, hackers pretended to be Web3 investors; they managed to convince investors to download files containing malware that stole their digital wallet credentials. The tactic, known as phishing or impersonation, is becoming the go-to trick for scammers targeting users and workers of blockchain and crypto firms who need to be more careful to conduct due diligence when receiving emails and communication from unknown sources.
Read more: Bitcoin Bosses: The Fab 5 Who Rule the Crypto Jungle!
Kucoin Twitter Scandal
Imposters hijacked the crypto exchange Kucoin’s Twitter handle and carried out a fake crypto giveaway. Unfortunately, some users were caught flat-footed and sent funds to the scammers’ accounts, an amount suspected to be just over $22,600. While this amount isn’t comparable to what users have lost in more serious hacking incidents, it simply tells how vulnerable social media users can be when sharing information. While the exchange may have promised to return all the funds any user could have sent to the scammers in the name of a fake giveaway, the damage had already been done to the firm’s reputation.
Curve Finance
At least $70 million was lost during the last weekend of July 2023 following a series of hacks targeting DeFi protocol Curve Finance. According to the firm’s statement, the hackers first targeted the firm’s pETH-ETH liquidity pool and made away with over $11 million. Soon after, a series of four other attacks were launched by different hackers targeting different liquidity pools where $70 million was said to have been lost. Moreover, it’s reported that white hat hackers conducted some of those hacks, where $50 million could have been lost.
Multichain
The Multichain Bridge suffered a massive attack where an estimated $126 million worth of crypto tokens was stolen. The incident occurred in early July 2023 and involved crypto tokens like DAI, Link, USDC, WBTC, and wETH. Soon after the news about the attack went viral, the Multichain management quickly advised users to desist from using the service and revoke all their lending approvals due to what they called “unauthorized” transactions. Rumors surrounding the incident intimated that the firm’s private keys had been compromised and used to approve fictitious transactions.
Euler Finance
Ethereum-based DeFi protocol Euler Finance experienced a flash loan attack on March 13 when a fraudster stole millions of dollars in DAI and other crypto tokens. According to the non-custodial crypto borrowing and lending platform, at least $196 million was stolen. However, in a strange turn of events, Euler Finance announced via Twitter the attacker had returned all the recoverable funds from the amount they had stolen. According to on-chain data, the funds were returned in two transactions of 8,080 ETH and 2,500 ETH as $12 million in the DAI stablecoin.
Atomic Wallet Hack
The Atomic Wallet suffered a hack on June 3, 2023, with the platform saying the incident affected less than 0.1% of their over 5 million users. While the platform reported working on modalities to identify the attacker, recover lost funds and collaborate with other cryptocurrency exchanges to freeze suspicious crypto deposits, it later emerged that the amount lost exceeded $100 million. Atomic never reported the suspected cause of the massive funds’ loss, but it said some exchanges froze at least $1 million worth of suspicious funds.
On a Cautious Note
With over 420 million users worldwide and estimated to reach over $2.2 billion by 2026, the crypto sphere is a minefield that has attracted hordes of cyber criminals targeting users’ slightest error of judgment. Criminals aren’t leaving any stone unturned in their effort to defraud individual and corporate victims who don’t perform due diligence.
Regardless of your crypto platform, you must apply multi-factor authentication or, better still, consider using biometrics on all your crypto accounts. Moreover, you also need to use strong and complex passwords and change them consistently.
Whether you’re a seasoned new trader or someone simply interested in cryptocurrencies and blockchain technologies, take the time to do your research on any crypto project before dipping your toes to avoid becoming a victim of crypto fraud because if it sounds too good to be true….it is probably a fraud, hodlers.
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