Intro
In this blog I will try to inform everyone current issues involving cryptocurrencies while offering some advice in the end to help address this. This is not nearly enough for those interested in crypto but it is a start. 🙂
The Fake Amazon Token
Crypto may seem easy to get into with big names like Bitcoin and Ethereum having mass media representation, however those who do not take time to research are falling victim to numerous scams. One scam included using Amazon’s name to pressure victims into trading Bitcoin for the fake Amazon token. The scammers would link a fake CNBC article in crypto focused groups, and users would then have 30 seconds to read the article before being redirected to a page which was offering pre-sale tokens[1]. With a progress bar showing that tokens were almost all sold out, victims were pressured to make hasty decisions. It is important to note that the website victims were redirected to was fully functioning, showing the level of authenticity scammers were putting forth.
Hacking is Another Major Fear
The crypto market is also at major risk to hacks. North Korea has been linked to two crypto hacking schemes in the last week with one being the ATP group BlueNoroff [2]. BlueNoroff sent crypto start-ups emails for business deals with a file that, when opened, would create a Windows backdoor for the hackers. The backdoor would then steal user information over a few weeks to eventually steal cryptocurrency. BlueNoroff targeted victims from many major countries including Russia, Singapore, China, the U.S., etc. The other North Korean hacking scheme is funded through the regime itself. In 2021 the hacking operating netted them $400 million[3]. The state-sponsored hackers used many methods including phishing emails and malware towards crypto exchanges and investment firms. The stolen crypto went through many steps making it difficult to trace its origins before ultimately being exchanged for cash.
Why is This Important?
With scams being international, there is a growing call for global action and rules to be set upon the new market. Russia recently cracked down hard upon hackers found within its borders, which was very interesting as Russia was seen as a safe haven by cybercriminals to attack victims without fear of punishment[4]. Many people are concerned that Russia’s new recommendations are cracking down upon crypto hackers to maintain control over the emerging crypto economy. The recommendations may appear to punish those in local markets within Russia, but it is also limiting the growth of crypto within the economy. With the Bank of Russia recommending crypto mining be shutdown, as well as more penalties for the use of cryptocurrencies to make direct purchases, we are beginning to see how different countries are addressing the emerging issues of crypto.
Key Takeaways and Advice
Crypto is growing at a tremendous rate as more people are buying into the idea that it may just not just be a fad. However, with this relatively new market many people are put at risk due to scams and hacks. It is important for people looking to get into crypto to take time and do research before diving in. With global regulations still being developed, the future is uncertain, so information is the key to success in crypto. Since the economy is young, it is important to understand and protect yourself from people hoping to exploit you. I cannot stress the importance of time and research for cryptocurrencies. Looking at what scams and hacks have worked on others in the past is a great way to avoid them happening to yourself. I hope this blog gave some insight for those looking into crypto as to what some of these scams/hacks are. Once again, take your time and do your research! 🙂
Resources:
- https://www.zdnet.com/article/amazon-fake-crypto-token-investment-scam-steals-bitcoin-from-victims/?&web_view=true
- https://cyware.com/news/bluenoroff-apt-group-eyeing-crypto-startups-35c36601
- https://cyware.com/news/north-korean-hackers-stole-crypto-worth-400-million-in-2021-2a6bc28c
- https://www.scmagazine.com/analysis/policy/will-ransomware-gangs-see-flow-of-cash-throttled-by-russia-cryptocurrency-restrictions?&web_view=true
This is a good article. Behind all the hype it’s sometimes difficult to make accurate risk assessments and know best practices, especially in a market that’s still so new and ever-changing.
I’ve heard that the worst thing you can do with regards to crypto investments is to keep them on an exchange somewhere. At that point all a hacker needs is your password (assuming you don’t have 2FA), and even then it’s not full-proof. I think a good practice is to own a hardware wallet and never share your seed phrase (used to generate your unique private key) with anyone, or anywhere online (ex: cloud service like Google Drive).
It’s always important to make sure that you purchase these from verified vendors, as there are cases of people reselling them and using the seed phrase to access your funds. It truly is the Wild West out there, so being over-prepared is the best way to go. This is one case where convenience/ease of access < diligence.
Your bring up a great point Achraf! While I will not vouch for or say any exchange is better than others, websites like Binance have released their rules and regulations on whether they can reimburse lost wallets or not. I hope to see further improvement among these exchanges as one of the major difficulties around crypto is the worry about security as you mentioned in your comment.
Very informative post, thanks for this. I do not currently have any crypto investments, but I am seriously considering investing in the future… I will be sure to keep all your tips in mind!
I’m glad to hear my blog helped you! Here is a I used when I first got introduced into crypto, hope this helps!
https://www.nerdwallet.com/article/investing/cryptocurrency-7-things-to-know
Hey thanks for sharing!
It is a very insightful blog. I have heard a lot about crypto in generally but have never made efforts to learn about it since I always thought it is a very risky field.
This blog has made me thinking about investing in crypto, but of course as mentioned in the blog, it is important to have information and knowledge before investing into crypto. Although I still think it would always be a pressure on the mind, whether it is safe to keep it or not.
Overall, good job on this blog!
You raise a common concern many have about crypto Amandeep! As Achraf mentioned above, companies are trying to tackle the security issue by releasing physical wallets like USB sticks to help the user feel more secure. Though this may raise more concerns, it is good to see that the market is developing to handle consumer concerns and I am excited to see what happens in the future!
Awesome post!
I’ve always been interested investing in crypto because of the fact that it is a super quick way to make a lot of money (lol). However, like you said, investing in crypto would mean taking a huge risk which I don’t want to do. I read posts all the time about the increasing cryptocurrency scams and I feel like as crypto becomes more popular, the number of scams will increase. Also, there definitely is a volatility risk when investing in crypto. The cryptocurrency market is never stable, you have to be prepared for the market to go in the opposite direction than what you were expecting. With the volatility risk, it is super easy to lose the money that you invested as well.
Interesting article!
Crypto is an interesting currency and has potential other traditional currencies lack. However, the user is responsible for the safety of their own currency which can be both empowering and traumatizing. It’s no shock that there are groups attempting to hack into large wallets and steal these resources. One solution would be ensuring that your wallet is safe on a physical hard-drive which should likely be disconnected from any network. While this solution can work amazingly for some, there have been instances of hard-drives being lost or passwords to unlock said drives being lost/forgotten. I’ve personally read of a couple of individuals who had lost over $200,000,000 USD from their own fault. I guess if individuals aren’t confident they can keep their data secure they should not be investing in such currencies and rely on traditional investment means and traditional currencies managed by banks with insurance protection.
Source for lost Bitcoin wallet: https://www.nytimes.com/2021/01/12/technology/bitcoin-passwords-wallets-fortunes.html
Great post , so much information and the best thing is to end the post by giving tips and advices .
Thank you
That was a great post to read! Prior to reading this article I wasn’t familiar with crypto investments. I do agree that we should devote time for searching about that currency and procedures to protect ourselves. Overall it was very informative article!!
Hello, This is a really important post for me.
Although, I am basically a gen-z kid following old-school methods. I really read about a recent scam about a crypto-currency that recently came out after a successful season of squid game launched on Netflix. People purchased it in bulk and at last, lost their money (the US $3.86 million only). I agree that you told us how to invest securely but I am satisfied with less profit as compared to crypto with my gold 😉
https://www.wired.com/story/squid-game-coin-crypto-scam/
I’m glad that I’ve read your post, as I am trying to educate myself about crypto-currency, which is a hot topic that I’m interested in. As crypto-currency is growing popular every day, it will attract a lot of people, even non-tech enthusiasts will want to invest their money. Therefore, they are an easy target for hackers and scammers to get an upper hand.
This is huge, because that crypto currency thing is now big on the market, with cyber attacks , it might bring it to failure. Most crypto’s are just scams now since you can loose real money.
Thanks a lot for your blog. This will make me more concerned before investing into crypto. Recently in life, I was thinking about how a 9 to 5 job will never make me rich and therefore it was time I make some investments so that I get a handsome return. No matter which social media you use, you will hear numerous people either making a ton of money or losing a fortune. But here whenever someone lost money, it was due to a bad investment. No one ever mentions that your crypto can be hacked and all your earning will vanish just like that. In addition, since the concept of digital currency is new, many laws are yet to be established. Now I am thinking what if I invest and somehow make money and then I see all my money is gone. It is quite concerning to be honest.
Great post!
I used to be very interested in the Dark Web. I learned that the users on Dark Web always prefer to use cryptocurrencies to pay for something because cryptocurrencies cannot be easily supervised by governments, they always prefer the governments to know nothing about what they do on Dark Web (maybe buying humans, I guess). Thus, I think the governments or some official organizations should start to make rules and policies to supervise and restrict the use of cryptocurrencies as quickly as possible, because the cryptocurrencies are causing more and more social problems in our society.