Crypto Scams To Increase By 75 Percent in 2021: Report
Top fraud prevention company Bolster released key findings in its recent Cryptocurrency Scam Report. The report, which cast real-life scenarios, shows the relationship between the upsurge of crypto-related scams and the industry’s meteoric growth.
Crypto’s Growth Attracting Criminals
According to the US technology firm, 400,000 crypto scams were documented in 2020 alone after an increase of 40% from 2019.
With cryptocurrencies still gaining notable traction and many homes suffering from the economic backlash occasioned by the pandemic, Bolster says crypto scams may climb to 75% in 2021.
Company CTO and co-founder Shashi Prakash said that crypto scams were among the fastest-growing criminal world categories. Prakash also said that as the nascent crypto industry grows, we are just at the start of a full-blown digital theft campaign. These crypto criminals are opportunistic and creating scams focused on trending crypto projects because they know these projects are generally new.
Crypto watchdog Chainalysis posted a similar report on the growing field of virtual currency theft.
The document showed that the crypto scam industry was worth more than $2 billion and pointed to Bitcoin as a clear beacon for these criminals.
The basis for this is clear.
Bitcoin has singlehandedly brought the crypto industry from the backlight into public view.
The premier digital asset controlling more than 80% of the crypto market cap has seen institutional demand shoot up.
Popular tech companies like Tesla Inc., Square, MicroStrategy are well-known Bitcoin hodlers.
Even financial instrument offerings are evolving around Bitcoin and Ethereum- another remarkable cryptocurrency. Digital assets investment firms like Grayscale, BlackRock are significant players in the Bitcoin-centered market.
Legacy financial institutions are also paying close attention to the crypto space. Now, talk of a state-sanctioned digital currency called central bank digital currencies (CBDCs) are already making the rounds. CBDCs, which will be backed and issued by the host country’s apex bank, aims to put a lid on private crypto ownership.
But just as the booming crypto space captivates the investing public, so are many bad actors looking to exploit the public’s knowledge gaps.
The Bolster document starts by noting that over 300 million websites were analyzed in the project. They targeted these searches towards cryptocurrency scams, and the touch-point was Bitcoin and other crypto-assets like Ethereum, Polkadot, Tether, Uniswap, and others.
The most recurring crypto scams in the last year were fake prizes, dubious giveaways, and sweepstakes, per the report. They were evenly matched with investment-related scams, advance fee schemes, and celebrity impersonations.
The criminals’ favorite crypto of choice were Bitcoin, ChainLink, and Ethereum. The top crypto exchanges these criminals used to launder their illicit wealth were Binance, Coinbase, and Gemini.
These Bitcoin exchanges were also subjected to malicious attacks by the criminal masterminds.
The report also said that Tesla CEO Elon Musk, John McAfee, and Yusaku Maezawa were always impersonated to defraud unsuspecting victims of their crypto-assets.