Crypto Scams Soar to $1.89 Billion in 2023: A Comprehensive Report on the Rising Threat

Cryptocurrency scams have surged by a staggering 1053 times, ballooning from $1.79 million in 2011 to $1.89 billion in 2023, according to a report by The Money Mongers, a group of crypto enthusiasts and researchers. Crypto investment frauds are a growing concern as opportunistic scammers exploit people’s desires for quick profits. Some key findings from the report include:

• In 2023, $1.89 billion was lost in 298 crypto hack incidents, with 2022 being a record year for crypto hacks, totaling $3.5 billion stolen in 284 incidents.
• From 2011 to the present, crypto companies and exchanges have suffered cumulative losses of $12.36 billion across 1207 incidents, with 193 exchanges compromised, resulting in a loss of $3.80 billion.
• The year 2018 was particularly grim for crypto exchanges, with losses of $1.1 billion due to hacking and theft.
• DeFi (decentralized finance) hacks are on the rise, with 93 incidents in 2022 and 76 in 2023, leading to a total loss of $1.12 billion.
• Bitcoin and Ethereum, two of the most widely used cryptocurrencies, have seen losses of 1,454,762 BTC and 1,175,082 ETH to hacks since 2011, amounting to $40.27 billion and $1.93 billion, respectively, at current prices.
• The two most common types of hacks, contract vulnerabilities, and flash loan attacks, have contributed to a total loss of $2.75 billion since 2011.

Cryptocurrency scams share similarities with traditional financial scams, but they target digital assets. Scammers make false promises regarding an asset’s value and employ various tactics to steal digital assets. Common crypto scams include contract vulnerabilities, flash loan attacks, SIM swap scams, upgrade scams, and pump-and-dump schemes.

Cryptocurrency operates on decentralized networks like blockchain, offering secure, transparent, and peer-to-peer transactions. Crypto scams exploit the digital nature of these assets, aiming to deceive investors and steal digital wealth. The report serves as a reminder of the importance of cautious and informed participation in the cryptocurrency market.