Cybercriminals loot over $600 million from crypto projects in H1 2023

Ruth C. | July 05, 2023

A new year brings a new wave of cyber incidents for the crypto sphere. According to the analysis by the Atlas VPN team, various crypto projects and their clients lost a whopping $666,354,302 to 125 cyberattacks in the first half of 2023. 

Nevertheless, compared to the same period last year, crypto-related cyber incidents and losses are declining. 

The data is based on the numbers provided by SlowMist Hacked, which collects information about cyber incidents and scam schemes connected to blockchain-related projects. Monetary losses were calculated based on the conversion rate of a particular cryptocurrency at the time of a hack or scam event.

The Binance Smart Chain (BSC) ecosystem experienced the highest number of incidents, totaling 30, resulting in losses of $25,137,913. Meanwhile, the Ethereum (ETH) ecosystem faced the most significant financial losses, with hackers plundering $265,237,633 from multiple Ethereum-related projects in 29 separate incidents.

Following closely in terms of losses is the Polygon ecosystem, which endured $122,685,000 in damages caused by only four cyber attacks. Additionally, various crypto wallets suffered losses of $109,200,000.

Additional crypto projects that were affected include exchanges, with losses totaling $56,622,628, followed by the Avalanche ecosystem projects with $9,000,000 in damages, the Heco ecosystem-related projects with $6,000,000, NFTs with $2,318,628, Bridges with $1,374,000, and various Blockchain projects with $570,000 in losses.

In total, 22% of cases were a result of malicious actors exploiting contract vulnerabilities. Furthermore, 14% of the incidents involved social media hacks that were subsequently utilized for social engineering attacks, ultimately leading to the extraction of funds from unsuspecting victims.

Crypto scams rob holders of nearly $250 million

It is not just the hackers who are to blame for the theft of crypto funds. Sometimes it is the crypto projects themselves. 

In the first half of this year, fraudsters swindled a staggering $248,769,543 from crypto enthusiasts. During the initial quarter, victims lost $9,355,832 to crypto scams, while the losses skyrocketed by 2,459% and reached $239,413,711 in the second quarter.

The largest sum of money lost to a crypto scam this year can be attributed to a South Korean project known as 'Blockchain for dog nose wrinkles,' which turned out to be a Ponzi scheme. The company lured investors with the promise of a blockchain app capable of identifying dogs based on their nose wrinkles. The project included its own cryptocurrency and enticed investors with the promise of substantial investment returns. As a result, it amassed approximately 166.4 billion South Korean won, equivalent to about $127 million, from 22,000 individuals.

Another notable crypto scam is CoinDeal, an investment fraud scheme that deceived over 10,000 victims, resulting in over $45 million in losses. The individuals behind this scheme propagated false and deceptive claims that investors could achieve high returns by investing in CoinDeal, which they promoted as a blockchain technology company. However, according to the Securities and Exchange Commission (SEC), no token sale or distribution ever occurred.

Occupying the third position on this list is a project called Fintoch, which managed to make off with an estimated amount of $31.6 million from its users. Fintoch claimed to be a blockchain-based financial platform developed by Morgan Stanley. It promised users a guaranteed 1% daily return on investment. However, the Singaporean government and Morgan Stanley issued warnings in May, alerting the public that the platform was a scam.

Cryptocurrency-related cybercrime is highly appealing to thieves because cryptocurrency payments lack legal protections or government assurances, while chances of recovering lost funds are nearly nonexistent. 

Choosing crypto services carefully, avoiding too-good-to-be-true offers and get-rich-quick schemes, and refraining from responding to unsolicited investment proposals or prompts to log into your crypto wallet and similar communications are just some of the measures that can help you avoid falling victim to crypto-related cyberattacks and scams.

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Ruth C.

Ruth C.

Cybersecurity Researcher and Publisher at Atlas VPN. Interested in cybercrime, online security, and privacy-related topics.

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Blockchaincryptoscamscyber attacks

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