In this era of growing popularity of cryptocurrencies, security is constantly gaining importance. It seems obvious, but still many market participants fall into traps set by fraudsters.
The statistics do not fare well
According to a report from the Federal Trade Commission (FTC), consumer losses related to crypto fraud have increased by as much as 10 times year-over-year. The total value of fraud between October 2020 and March 2021 exceeded $80 million. The number of people who were victims of them amounted to almost 7 thousand.
The agency reports that the most popular way to attack digital assets was to impersonate a well-known figure, with a high level of public trust, present in the blockchain space. These types of personalities would come out with an offer to send cryptocurrencies to a designated address, suggesting to wait to send them back, in larger amounts. Consumers have reported losing around $2 million to individuals posing as at least Elon Musk. Another popular tactic involved posting fake investment tips on forums, resulting in victims logging into fake websites, again resulting in lost funds.
Increased attacks in 2020
Even more interesting data is shared by VPN Atlas, which looked not so much at fraud as at the hacking activities themselves. They show that in 2020, blockchain hackers stole nearly $3.78 billion in 122 independent attacks. What’s worrisome is that the total number of attacks in the crypto space for last year, accounts for as much as 33% of all incidents recorded since the day the sector was created. The most common target of hackers was decentralized applications based on the Ethereum network. In 2020, they experienced 47 successful attacks resulting in the loss of $436.4 million.
Cryptocurrency exchanges were not without flaws, having suffered as many as 28 breaches with total losses of $300.2 million.
The number of hacks on cryptocurrency wallets has become alarming. These potentially most secure sites recorded 27 successful attacks. Total losses in this area exceeded $3 billion.
Ensure your security by choosing the right wallet
However, it is important to understand that the types of crypto wallets are many. In addition to the hot wallets present on exchanges, we also have private desktop wallets, as well as hardware wallets. Using the latter is definitely the best way to secure your funds. If you are interested in such a wallet, be sure to take a look at the article titled “Cryptocurrency hardware wallets”, where we discuss in more detail how they work.
