Did You Know That Cyber Robbers Have Made Off With $225 Million in 2017?

In the past, we’ve written about cryptocurrency such as bitcoin and how some people have managed to make small fortunes off of it, as well as its potential applications for Black wealth.

By Ryan Velez

In the past, we’ve written about cryptocurrency such as bitcoin and how some people have managed to make small fortunes off of it, as well as its potential applications for Black wealth. When one paints such a positive picture, the question comes up as to why everyone doesn’t take part in such activities? Well, for one, there is a very real risk involved. Initial coin offerings happen at a rapid pace, but Insurance Business Magazine reports that there is a 1-in-10 chance you could end up a victim of theft, and robbers have made $225 million this way this year.

The primary source of these ill-gotten gains is phishing scams. In such scams, investors are tricked into sending money to internet addresses pretending to be funding sites for digital token offerings related to the ethereum blockchain technology.

“It’s a huge amount of money to generate in such a short period of time,” said Jonathan Levin, co-founder of Chainalysis, whose software and database are used by some of the largest bitcoin companies and U.S. law enforcement agencies. “The cryptocurrency phishers are doing pretty good against all the other types of criminals that are out there.” This is actually approaching the levels of losses from robberies across the U.S. in 2015.

One of the main ways robbers get their hands on information and money is through ICOs. These digital token sales raise ether, and users transfer the funds to addresses provided by various startups. However, unscrupulous individuals will sometimes create fake websites, getting credentials from over-eager investors via targeted email campaigns, twitter posts and Slack messages. Slight misspellings or names that sound similar to actual ICOs muddy the waters even more.

Another common form of crime is exploiting loopholes in actual projects. In one instance, the DAO, or decentralized autonomous organization, was targeted. Originally designed to democratize how ethereum projects are funded, a bug was taken advantage of to steal $55 million worth of ether at the time.

One thing to note is that the most prominent of cryptocurrency was not included in these statistics. Levin explains that it’s not a matter of bitcoin being safe. Rather, data is much harder to track, as many bitcoin scams target individuals, versus ICO scams that try to dupe as many people as possible. “The overall figures mean there are infrastructure that we need to build to help prevent people from getting abused,” said Levin.

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