Crypto Scams Remain Persistent: Exit Scams And Hacks Cost Crypto Sector $160 million In February

The crypto industry is perpetually vulnerable to malicious activities, with hackers seemingly relentless in their pursuits. It’s been only two months into 2024 and crypto scams are already making their appearance. According to blockchain auditor CertiK, crypto hacks and scams led to over $160 million in lossesFlash loans: ~$138k
Exploits: ~$101M
Returned: ~$6.4M…

— CertiK Alert (@CertiKAlert) February 29, 2024

For example, on February 28, Certik noted that omnichain CDP protocol Seneca USD was exploited and the perpetrators stole at least $3 million worth of assets. In total, Seneca USD lost $6.46 million in February. 

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The largest exploit, however, happened on South Korean blockchain game development platform PlayDapp. An attacker took advantage of the platform’s smart contract vulnerability and stole $32.35 million worth of cryptocurrency. Other large exploits occurred on Fixed Float, Jihoz.Run, and DuelBits, which suffered losses of $26 million, $9.7 million, and $4.66 million respectively. 

Certik noted that investors also lost $58.2 million to exit scams in February. This is when the developers of a crypto project suddenly disappear with investors’ funds after attracting huge sums of money. 

Total crypto market cap is currently at $2.262 trillion. Chart:

Hong Kong-based cryptocurrency exchange BitForex accounted for the majority of the exit scams in February. The exchange abruptly went offline following the mysterious withdrawal of $56.5 million from its hot wallets. RiskOnBlast, a gambling and exchange platform, also disappeared with $1.29 million worth of investor money. 

The industry also lost $138,000 to flash loans, a drastic reduction from the $15.3 million recorded in January. $6.4 million was returned, with the largest coming from the Seneca exploiter who returned 1,537 ETH worth $5.3 million to the project.

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Can The Crypto Industry Be Truly Free From Scams?

Cryptocurrencies provide full anonymity to their users, but hacks and thefts are some of the drawbacks that come from the wider advantages of this anonymity. Despite various security measures being employed, attackers have upped their game and expanded their operations over the years. 

Recent reports, however, reveal that scams and exploits have reduced drastically in the past year. Particularly, a report disclosed that losses from crypto scams dropped from $39.6 billion in 2022 to $24.2 billion in 2023. 

Featured image from Pexels, chart from TradingView

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Author: Scott Matherson

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