crypto attacks

In a recent report published by CipherTrace, around $1.7 Billion was lost to crypto scammers and hackers. For some perspective, this is 3.6x more money than what was stolen in 2017. Clearly, these cryptocurrency attacks are growing in popularity. So what should we be looking out for?

A Report on Cryptocurrency Attacks

According to the report published by CipherTrace, $950 Million was lost due to hacked cryptocurrency exchanges. The majority of this figure comes from the attack on Japanese cryptocurrency exchange Coincheck, losing over $500 Million worth of NEM during early 2018.

In addition to these scams, research has found that many investors and exchange users lost up to at least $725 Million worth of crypto assets during 2018. Many of this was due to exit scams, fraudulent ICOs, exchange hacks (both real and fake), and even Ponzi schemes. For those that don’t know, exit scams are a bold play of confidence in which the promoters of a cryptocurrency ICO or any other crypto project eventually fails to launch. OR, the executives of a cryptocurrency exchange will cough up an excuse to say why they can’t return any of their users’ assets.

While all of this information may seem daunting, CipherTrace believes that this criminal activity in the crypto space is slowing down due to impending crypto regulations.

Cryptocurrency criminal activity continues to evolve and accelerate. Fortunately, pending global legislation will hamstring many criminals, global gangs, and terrorist groups by greatly reducing their opportunities to launder. These tough new laws will drive bad actors to not only innovate but also flock to jurisdictions with weak regulatory oversight, as we have shown in earlier research. CipherTrace’s blockchain intelligence and anti-money laundering technology helps exchanges, financial services firms, regulators, and law enforcement work together to create trust in the crypto ecosystem

CEO of CipherTrace, Dave Jevans.

Top 10 Trending Crypto Attacks

According to CipherTrace. There are 10 main types of cryptocurrency attacks we could be seeing more of in the future. Here’s what they are so that you know what to look out for:

Crypto Dusting:

This is a new form of blockchain spam. It works by eroding the reputation of the recipient by sending crypto tokens from known crypto mixers. Crypto mixers are often used to launder dirty crypto assets, thus, receiving any crypto from these services is never a good look.

‘Next Gen’ Crypto Mixers:

The rise of crypto scams has consequently made many of the bitcoins in on the market dirty. Thus, there are mixers used to exchange dirty tokens for freshly minted coins. In essence, they work by cleaning money through various cryptocurrency exchanges.

SIM Swapping:

This is a method of identity theft. Attackers take advantage of this method by essentially taking control over a users mobile device in order to steal their credentials to access their crypto holdings. This is one of the main reasons we push 2-Factor Authentication as SMS is Not Secure.

Evading Sanctions:

Many nations across the globe are using cryptocurrency in an attempt to circumvent sanctions promoted by many different countries. Some examples of this are the Iranian, Venezuelan and Zimbabwean governments.

Datacenter-Scale Attacks:

There have been recent discoveries of takeover attacks that work by mining for cryptocurrency on a huge scale. They have been discovered in many data centers across the world, including Amazon Web Services (AWS). Were the Bitcoin Hash Wars a result of this?

Email Extortion/Bomb Threats:

Recently, we have seen mass-customized campaigns for phishing emails, all made by crypto scammers. These cryptocurrency attacks use old passwords and spouse names/family member names and demand Bitcoin. We also saw a spike in bomb threat extortion attempts in December.

Crypto Ransomware:

Ransomware has become a highly popular cryptocurrency attack recently. Hacks like CryptoLocker work by infecting a user’s computer, then encrypting all of the user’s files making them inaccessible. If the user ever wants to use their computer system again, they’ll have to pay an amount of Bitcoin within 48 hours or have all their files deleted/encrypted for eternity.

Decentralised Stablecoins:

Stablecoins have been growing in popularity in the past few months. These are coins with a stabilized value; designed for use as hard to trace (anonymous) private cryptocurrencies. Many criminal organizations and hackers use these coins to transact stolen crypto funds with ease.

Shadow Money Services (MSBs)

There are many unlicensed MSBs around that allow the banking of cryptocurrency without any host financial institutions knowing anything about it. Thus, banks fall victim to yet another risk they are unaware of.


While cryptocurrency attacks can be scary to hear about all the time, they’re not hard to avoid. In fact, if you keep your wits about you, you’ll be able to traverse the crypto space without running into a scammer and losing any money easily. Many of the scammers in the crypto space rely on people being uninformed in order to pull off their scams.

If you know what to look for, being able to determine if you’re about to walk in a scam or a legit opportunity is easy.

What do you think of cryptocurrency scams? Have you ever fallen victim to one? Let us know your thoughts in the comments below!

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Disclaimer Notice:

This article is intended to educate and should in no way be seen as investment advice or an enticement to use the platform. Bitcoin is highly volatile with big profit opportunities but you should also remember that you could lose part or all of your investment whenever you take part in any high risk investment. Bitcoin trading is not a regulated industry in South Africa, which in itself carries additional risks. IF YOU ARE NOT AN ASTUTE BITCOIN TRADER, SEEK INDEPENDENT FINANCIAL ADVICE BEFORE MAKING ANY INVESTMENTS.