How common is crypto theft?

How common is crypto theft?

Cryptocurrency & Blockchain

According to cyber expert Ari Redbord from TRM Labs, “2022 was the year of the hack. While FTX’s crash and the so-called crypto winter dominated headlines, more pressing has been the crypto businesses getting attacked at an “alarming speed and scale.”

Blockchain analysis company Chainalysis found 0.15% of known cryptocurrency transactions conducted in 2021 were involved in illicit activities like cybercrime, money laundering and terrorism financing, representing a total of $14 billion.

However, many people still feel that crypto is the next big thing.

Moreover, they believe they can use it for practical purposes but also as an investment. Holding crypto while it increases in value is one of the better ways of doing this.

Romance Scams

Many individuals want to find a partner, and some clever crypto thieves take advantage of that. A romance scam usually involves someone impersonating an individual on a dating site and reaching out to their potential target.

The scammer might say they need money in the form of crypto so they can visit the target. They may also say they have a sick relative or make up some other reason why they need money.

To avoid falling for this, don’t send crypto to anyone you haven’t met in person. 

Investment Scams

Investment scams typically involve someone who says they’re a crypto genius, and they can give you back your investment many times over if you just trust them with your crypto assets. These usually turn out to be pyramid schemes or outright lies, similar to what Bernie Madoff perpetrated.

To avoid these scams, don’t trust your crypto to individuals who say they can increase your assets dramatically. If these investment opportunities sound too good to be true, they usually are.

Phishing Scams

Email phishing scams solicit crypto from you in various ways. Common ones are made to look like they come from legitimate entities, but they’re fraudulent. An email might say you should send a small amount of your crypto so the recipient can release a large inheritance to you. They might also claim your crypto is going to a charitable cause.

Never send your crypto or other monetary forms when someone you don’t know sends you an unsolicited email. These are almost always scams.

Crypto Exchange Theft

Crypto exchanges sometimes charge exorbitant fees to either hold your crypto or when you trade or exchange it. This is not a scam, per se, but it’s still dishonest.

To avoid this, study any crypto exchange you use before you sign up with it. Research a few different ones, and only pick one that features reasonable rates on trading, exchanging your crypto assets, or holding them with that platform.

Fake Exchanges or Wallets

You might also have a hacker or dishonest person who creates a sham website or platform. They will encourage you to store your crypto there, trade it, or exchange it.

In reality, the exchange is fake, or the wallet that holds your crypto gives the person who set up the site instant access to your deposits. To avoid these situations, research any crypto platform or digital wallet before you use it.

Watching out for these crypto scams should keep your assets safe.  

For further reading see our piece: What is the best wallet to hold crypto?

Cryptocurrency & Blockchain

How common is crypto theft?