- In 2019 alone, cybercriminals were able to siphon away $4.26 billion from cryptocurrency users and exchanges, according to a new report by CipherTrace.
- BITPoint, a cryptocurrency exchange in Japan, suffered one of the biggest scams this year, losing $28 million in July.
- Six people were arrested in the Netherlands and the UK over a $27 million “typosquatting” scam, which involved making a fake website to gain access to user Bitcoin wallets.
- Binance, one of the world’s largest cryptocurrency exchanges, had $40 million of bitcoin stolen in May.
- Visit Business Insider’s homepage for more stories.
For fraudsters and cybercriminals, 2019 has been a big year.
According to a report by CipherTrace, since January $4.26 billion in total has been stolen from cryptocurrency exchanges, investors and users.
Like any heist, a cryptocurrency hack is only successful when the perpetrators can actually make a clean getaway.
This means stealing cryptocurrency from unsuspecting users, avoiding the long arm of law enforcement, laundering that money, and finally, finding an exit so that the currency actually be spent in the real world.
But that isn’t how it always plays out.
Here are some of the biggest cryptocurrency scams — and arrests — of 2019:
Hackers steal $40 Million in crypto from Binance
Binance, one of the world’s largest cryptocurrency exchanges, had bitcoin worth $40 million stolen in May.
While it is uncommon to see an established exchange like Binance get hacked, the cybercriminals managed not only to steal 7,000 bitcoin but also two-factor authentication codes and API tokens. Binance also revealed that the hackers were able to compromise “very high net-worth accounts”.
Despite the hackers getting away with $40 million worth of bitcoin, the impact wasn’t too great for Binance because it was only 2% of the exchange’s overall holdings.
In a statement on their website, Binance wrote: “The hackers had the patience to wait, and execute well-orchestrated actions through multiple seemingly independent accounts at the most opportune time. The transaction is structured in a way that passed our existing security checks. It was unfortunate that we were not able to block this withdrawal before it was executed.”
The cryptocurrency exchange also said in the statement that it would use its self-insurance fund, SAFU, to cover user losses.
Two Israeli brothers were arrested after a phishing scam that lasted three years
According to CipherTrace, two brothers from Israel were arrested on June 21 for an alleged phishing scam that lasted for three years.
In this time, the Gigi brothers, Eli, 31, and Assaf, 21, are alleged to have stolen over $100 million in cryptocurrency.
They are alleged to have lured investors from crypto trading forums such as Reddit onto websites that mimicked prominent crypto exchanges.
Six arrested in UK and Netherlands over $27 million “typosquatting” scam
Six people who were suspected of a bitcoin scam worth $27 million were arrested in June, according to a Europol press release.
After a 14 month-long joint investigation, authorities simultaneously arrested five men and one woman at their homes in southwest England and the Dutch cities of Amsterdam and Rotterdam.
The theft affected over 4,000 victims, who were spread out in 12 different countries.
Europol said the investigation centre around “typosquatting,” a method which entails creating a fake online cryptocurrency exchange to gain access to victims’ bitcoin wallets
The investigation was carried out as a joint operation by the UK South West Regional Cyber Crime Unit (SW RCCU), the UK’s National Crime Agency (NCA), and the Dutch police.
A hack is suspected as the cause of Kraken Bitcoin flash crash
Kraken, a major Bitcoin trading platform, experienced a flash crash that resulted in the price of the cryptocurrency suddenly falling from $8,400 to $75.
But shortly after, the price stabilized again and many didn’t think anything of it. It was simply thought of as a glitch in the system. However, an analysis from CipherTrace suggests that the crash was caused by a clever hack.
According to CipherTrace’s research, the hacker compromised the account of a user with a large amount of cryptocurrency, and stole 1200 bitcoin, which was worth more than $10 million at the time.
Singapore exchange Bitrue hacked for over $4 million
Bitrue, a cryptocurrency exchange based in Singapore, had $4.2 million in user assets stolen in June.
The company said that 9.3 million XRP (worth $4 million) and 2.5 million ADA (worth $231,800) was also transferred off its platform.
Hackers were able to break through the exchange’s security system by exploiting “a vulnerability in our Risk Control team’s 2nd review process”, according to a company statement on Twitter.
Bitrue has also stated that it will be returning the lost funds to its users and revising its security measures.
Follow Business Insider India on Twitter.