More than half-a-billion dollars worth of cryptocurrency has been stolen year-to-date, data from AltIndex.com has found.
In the first three months of 2024, hackers and scammers performed about 50 crypto attacks, totalling US$430 million (AU$653 million) worth of stolen cash. More than half of that was performed in just one scam in February, when crypto gaming platform PlayDapp suffered breaches, resulting in the loss of PLA tokens worth US$290 million (based on their market value at the time).
That US$430 million figure is about a third of what scammers stole in the whole of 2023, which was the second-worst year on record in terms of crypto theft. Last year, 283 scams were reported, totalling $1.75 billion in stolen money. And it’s a growing trend – just 46 thefts were reported back in 2019, totalling US$345 million.
According to the report, DeFi protocols suffered the most losses year-to-date, primarily due to flawed codes, which enabled hackers to use smart contract errors to steal funds.
“Statistics show DeFi scams made up 60% of all crypto heists in the first quarter of the year, with a total of 28 reported cases,” the research states. “January saw 12 DeFi attacks, while February and March both saw eight of these scams. At the same time, there were 12 reported crypto scams in this period.”
The news follows research from the Federal Bureau of Investigation, which found investment fraud was once again the costliest crime in the US 2023, up 38% to US$4.57 billion, from US$3.31 billion in 2022.
Crypto investment scams made up a large portion of that, with losses totalling more than US$3.94 billion in 2023, an increase of 53% compared to US$2.57 billion in 2022.
“These scams are designed to entice those targeted with the promise of lucrative returns on their investments,” the paper stated.
Last year, the FBI warned of the growing trend in crypto scams, saying they usually begin with a romance or confidence scam, and evolve into crypto investment fraud.
“Criminals use fictitious identities to develop relationships and build rapport with victims,” the FBI stated. “Criminals target victims using dating applications (apps), social media platforms, professional networking sites, or encrypted messaging apps. Once trust is established with victims, criminals introduce the topic of cryptocurrency and claim to have expertise, or an affiliation with experts, who can help potential investors achieve financial success.”
In Australia, the Australian Competition and Consumer Commission revealed investors had reported losing more than $350 million to crypto-based investment schemes since 2020, across 7000 reports. But the actual amount would likely be higher, as the ACCC estimated just 13% of losses were reported to Scamwatch.
It comes as the crypto market experiences a recovery. Bitcoin, which is projected to hold its halving event in April this year, is priced at $100,750 (at the time of writing), after hitting an all-time-high of $110,353 in March.
“Constricting supply and increasing demand may make it more likely for the price of any asset to go up,” Investment firm Fidelity noted in a recent blog post. “In the past, Bitcoin’s price has made new all-time highs following each halving.”
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