With 2020 being the best year for investments in cryptocurrency, cybersecurity experts warned of a rise in crypto frauds. According to blockchain analytics firm CipherTrace, hacks on decentralized finance (DeFi) companies accounted for 21% of the total theft volume in 2020, which is a steep rise from the negligible volumes seen in 2019.
Russian cybersecurity firm Kaspersky has further warned of an increase in Bitcoin theft in 2021. It said the pandemic may lead some economies and real-world currencies to plummet, which will make Bitcoin theft “a lot more attractive”. “We should expect more fraud, targeting mostly BTC, due to this cryptocurrency being the most popular one.”
So far this year, global crypto exchanges, including KuCoin and Eterbase, have suffered high-profile hacks. While attackers stole $280 million from Seychelles-based KuCoin, the Eterbase attackers made off with cryptocurrency worth $5.4 million. In August, 2gether suffered a €1.2 million hack, while Bitcoin worth $3.1 million were stolen from crypto-friendly neo-bank Cashaa in July.
In fact, the Cashaa hack started in India and forced the company to halt all transactions for 24 hours. “On 8 July, an employee had reported a machine malfunction with the systems provided to him by the company. Hence, he requested to operate from his PC and set up multiple alternative online wallets on various platforms like Blockchain.com, Huobi etc,” the platform said in a statement.
“We made an exception and allowed him to do so keeping ‘customer experience’ in mind for the ongoing OTC deals/transactions. After the mishap, our team secured the abused system for further investigation and the employee has been suspended until the end of the investigation,” it said.
Saket Modi, chief executive of Indian cybersecurity firm Lucideus, said: “We have seen multiple types of cyber fraud around cryptocurrencies. Starting from fake crypto investment platforms and fake crypto wallet scams to new forms of malware targeting lesser-known cryptocurrencies to crypto-jacking, multiple consumers have fallen prey to such scams and these are only increasing in number.”
Lucideus recently added training videos to arm consumers against crypto-jacking in an app called SAFE Me.
Coincidentally, India has also seen a boom in crypto investments in 2020, fuelling global growth and interest in digital currencies.
Cryptocurrency exchanges such as WazirX have seen as much as 400% growth in user base during the year. According to data from peer-to-peer Bitcoin marketplace Paxful, India has traded $94,794,948 between 2015 and 2020, making it the second largest crypto trading market in Asia.