Among the most widespread problems in the cryptocurrency world, there is money laundering, including thefts, scams, ransomware, hacking attacks, frauds, and other types of cryptocurrency crimes. The first half of 2021 can boast a high level of various crimes in the DeFi sector.
One of the biggest crypto thefts in the current year was the disappearance of the founders of the Africrypt platform with 69 000 BTC worth $ 3, 6 billion dollars at the moment of the theft.
Crypto scammers are becoming more trickish. Therefore, it’s becoming more challenging to catch crypto criminals. Scammers used the image and name of Elon Mask during his appearance to get cryptocurrencies worth $100k.
In spring 2021, $10 million was stolen in the Rari Capital ETH Pool. During this hacking attack, a malicious actor created an “evil contract” resembling a smart contract created on this platform. A hacker used flash loans to cause inflation. He earned on the difference of the courses.
In May 2021, criminals hacked PancakeBunny protocol for $45 million. A malicious actor used 8 flash loans. As a result, around 697,000 additional tokens were issued.
Later, hackers withdrew $7.2 million in 14 transactions. The price of true tokens issued at the platform rose essentially due to the fake code that could change the reserve supply of trading pairs. A malicious actor used 14 flash loans involving different tokens.
In summer 2011, the smart code of ChainSwap was used by hackers. As a result, investors lost $4.4M USD.
Founders of the scam project WhaleFarm gathered $2.3 million from investors, promising them 7,000,000% APY. After ICO started, scammers disappeared with funds. After that tokens lost 99 percent of their value.
Many of the scammers’ schemes were implemented in the same way while promising unrealistic APYs and being launched by anonymous teams. These are two of the most important signs to suspect the scam.
Speaking generally, by the end of the second quarter of 2021, hacks in the decentralized sector amounted to $361 million that is more 2, 7 times than in the second quarter of the previous year.
Flash loans became one of the most popular scammers’ schemes used in many attacks in the current year. The main reason for this is that flash loans don’t require KYC verification. It’s tough to catch frauds without identification.
How to protect your crypto assets?
If you take care of the reputation of your cryptocurrency company or your own reputation, you should protect your crypto assets from “dirty money”. While trading cryptocurrencies or exchanging your digital assets, you never know where crypto assets come from. If crypto assets were stolen from the blockchain platforms or gotten in any dishonest way, they are “dirty”. If “dirty” money comes into your wallet, you become an owner of “dirty money” which damages your reputation in the cryptocurrency world.
To protect your wallet from stolen, ransomed, and hacked assets, you should use blockchain analytics and AML tools that can trace all the addresses where the cryptocurrencies were before entering your wallet. Among the most popular AML tools implemented by diverse payment systems, we can emphasize CipherTrace, AMLBot, and others. AML services used in everyday life guarantee the “purity” of incoming assets.
How avoid scams?
While investing in the ICO or cryptocurrency world, you need to pay attention to all the pitfalls to avoid money losses. ICOs and cryptocurrency projects promise newcomers to get rich quickly without difficulties. This attracts a lot of scammers and fraud in this game.
If you don’t want to become a victim of scammers’ schemes, you don’t need to invest in platforms created by the suspicious team. If team members are anonymous or have a bad reputation, this is a significant sign to think of the scam. In addition, if the project seems to be very successful and offers unrealistically high APY, you need also to check whether this is a scam or not. The best advice in this situation is to search for outside sources to be confident in the legitimacy of the project in which you invest your money.
One more important item is to check the progress of the token sale. True projects provide potential investors with a high level of transparency. If the founders of ICO make it difficult for everyone to look through the progress of tokens’ sale, it’s a sign that this can be a scam.
In conclusion, there are a lot of tricks in the cryptocurrency world. Since authorities weakly control cryptocurrencies, this infrastructure is very attractive for scammers, fraud, hackers, and other criminals. It’s very important to learn to protect your crypto assets from “dirty money” and keep your reputation or your company’s reputation. For this, you should use crypto analytics and AMl services, allowing you to verify crypto transactions.