Cryptocurrency intelligence firm CipherTrace says that in just two quarters cryptocurrency scams, fraud and thefts netted bad guys $4.26 billion. This compares to $1.7 billion for all of 2018.
Crime is up several hundred percent even though exchanges are trying hard to improve security.
The attackers are getting more sophisticated, but the users are not. The attackers are using SIM swaps, phishing and URL hijacking, among other attack methods.
Apparently, insider fraud is the largest attack vector and also the hardest to protect against.
And don’t forget the total collapse of several exchanges such as QuadrigaCX in Canada.
If the second half of 2019 matches the first half, that will mean over $8 billion in losses compared to $1.7 last year, an almost 500% of last year’s total.
As a result of these huge losses – for which customers are not insured – governments are stepping up regulations. Of course, as we all know, governments are great at solving problems from the last century, but not very good at solving problems from last year or next.
That doesn’t mean that they won’t implement regulations; it just means that if you are hoping those regulations will protect your cryptocurrency, that is probably optimistic.
Word to the wise – don’t invest anything in crypto that you can’t afford to lose 100% of and use every protective measure available, even if it is inconvenient.