Crypto has another problem – scammers will stop at nothing to steal digital currency

 ·14 Jun 2022

Even by the standards of this volatile year, Monday’s wild ride throughout financial markets stands out, Bloomberg reports.

It said that cryptocurrencies plummeted so violently that a popular lending platform froze withdrawals to prevent a very modern kind of bank run.

Bitcoin plunged to the lowest in about 18 months after the freezing of withdrawals by the Celsius lending platform added to concern that systemic risk in the crypto ecosystem will accelerate the digital-asset market meltdown.

The world’s largest digital token tumbled as much as 17% to $22,603 – its lowest since December 2020. Other cryptocurrencies also declined as a broader sell-off continued.

Bloomberg said that the total market value, which topped $3 trillion in November, dropped below $1 trillion during New York trading hours on Monday, citing CoinGecko.

“The fundamentals to support stabilization and recovery just aren’t there,” said Steven McClurg, co-founder and CIO at crypto fund manager Valkyrie Investments. “Things can and likely will get worse before they get better.”

Binance, the largest crypto trading platform, temporarily suspended withdrawals of the Bitcoin network because of a transaction processing issue. Withdrawals were later resumed.

The selloff comes as traders are boosting bets for a more aggressive pace of Federal Reserve tightening after data Friday showed US inflation jumped to a fresh 40-year high in May.

Cryptocurrencies, which have struggled amid the Fed’s policy in recent months, have been hit particularly hard. The collapse of the Terra/Luna ecosystem last month, and lender Celsius pausing withdrawals Monday morning Asia time, have further eroded confidence in the space.

“If you do get long, perhaps think about doing so with either a long call spread or short put spread to limit risk” on Bitcoin futures, said Rick Bensignor, president of Bensignor Investment Strategies and a former strategist at Morgan Stanley. “If this dives, there’s no reliable support nearby.”

Mike Novogratz, the founder and chief executive officer of Galaxy Digital Holdings, said that cryptocurrencies are closer to a “bottom” than the US equity market. Bitcoin is down around 67%, while Ether has slumped 74%, respectively, since hitting record highs in early November.

“Ethereum should hold around $1,000 and it’s $1,200 right now. Bitcoin is around $20,000, $21,000 and it is $23,000, so you are much closer to the bottom in crypto than you are where I think, stocks, are going to have another 15% to 20% decline,” Novogratz said at the Morgan Stanley Financials Conference.

Let’s go phishing 

Global cybersecurity and digital privacy company, Kaspersky, meanwhile, said it has detected nearly 200,000 phishing attacks targeting crypto.

Kaspersky experts took a close look at the phishing pages aimed at potential crypto investors as well as the malicious files that are distributed under the names of the 20 most popular cryptocurrency wallets.

Since the beginning of 2022, Kaspersky said its products detected and prevented almost 200,000 attempts to steal users’ digital currencies and credentials to their wallets via phishing. The number of such attempts almost reached 50,000 in April, which is half of the indicators for the first quarter of 2022.

Crypto wallets are the primary target for scamming and malicious activity, it said.

With the boom in digital currencies observed over the past five years, Kaspersky experts have seen various cybercriminal tactics used to steal cryptocurrency – from luring victims with gifts sent by crypto exchanges to distributing Trojanized DeFi wallets.

Crypto wallets are the primary target for scammers because they are the initial place of storage for cryptocurrency and deal with large amounts of virtual money.

In 2022, Kaspersky said its products have recorded 193,125 phishing attempts aimed at potential crypto investors or users interested in cryptocurrency mining. Throughout the first quarter of this year, Kaspersky experts discovered about 107,000 attempts. Then in April alone, there were nearly 50,000 attempts.

“Fraudsters mimic the original crypto wallets’ websites and lure victims to enter a personal seed-phrase, a secret phrase of 12 or 24 words that ensures the security of the wallet, along with a password and private key. Once the user shares their secret phrase, they’re redirected to the real website, however, their account and all of their savings are now in the scammer’s hands.”

Kaspersky said that crypto wallets have become the target of numerous malicious and scamming activities, including not only phishing pages disguised as the most popular wallets but also malware distributed in their names.

“Scammers will stop at nothing to steal cryptocurrency. With the growing value of digital currencies, fraudsters have been intensifying their scamming activities toward potential investors. Phishing crypto scams deserve special attention – because they’re based on social engineering, these attacks do not require any advanced technical skills to be launched and work well for the fraudsters,” said Alexey Marchenko, head of Content Filtering Methods Research at Kaspersky.

“They are often successful due to a user’s inattention and lack of awareness. Hence, users need to be wary of basic scamming indicators: offers that are too generous, proposals from unknown senders as well as requests for money with the promise of future profit.

Read: ‘Perfect storm’ to hit middle-class South Africans: CEO

Show comments
Subscribe to our daily newsletter