Most of the funds or about 22 percent was lost through fraud in the first two months of this year. If the trend continues, cryptocurrency projects would lose more than $3 billion by the end of this year.
Bitcoin.com website has found out in their recent investigation that fraudsters stole $1.36 billion worth of cryptocurrencies during the first two months of 2018. Additionally, fraud constituted 30 percent of all cryptocurrency scams followed by hacking attempts at 22 percent and exit scams at 17 percent while phishing constituted 113 percent of all attacks.
This means that crypto projects could lose a total of around $3.25 billion by the end of the year surpassing GDP of smaller nations!
Cryptocurrencies, though open-source and decentralized, are constant targets for scams, including digital theft, phishing, fraud, and hacking just like any other digital platform would.
During the two months of this year, Coincheck Inc suffered a hack where attackers made off with nearly $500 million worth of virtual tokens. This may be the worst attack in cryptocurrency history. Another crypto exchange BitGrail, lost about $195 million worth of tokens.
The amount lost in cryptocurrencies might be higher given that not all scams are reported. According to the finding by Bitcoin News, small-ticket scams totaled about $542 million. However in the two months even if the three largest scams were to be considered outliers. This means about $9.1 million is lost per day in these scams.
It may not entirely be true that decentralization attracts thieves because the high price of cryptocurrency. It has been a dominant factor in encouraging these attacks. However, thieves also attack cryptocurrencies and exchanges because of their anonymous nature.
Again, more trading, exchanges, and transfer services continue to be launched making the space more complex. There is no doubt that as the space expands, fraud and scam will also increase.