Cryptocurrency-related scams increased 81% in 2021, with stack draws being a very common and incredibly damaging form of cybercrime, Chainalysis reports.
2021 has been a year of incredible growth for cryptocurrency, genuinely legitimizing the medium of virtual exchange in several different ways. Besides currencies like Bitcoin and Ethereum becoming a bit more accessible, if not completely mundane, many other forms have started to take shape online. Platforms like Patreon and Facebook have even started working on developing and integrating their own crypto exchange line, while also allowing compatibility with some already established currencies. Many other varieties of virtual exchanges have also started to appear in the face of growing interest in cryptocurrency, although they haven’t received the same enthusiastic response (looking at you, NTFs). All in all, it’s interesting how deep the world is going in evolving everyday practices towards more virtual spaces and platforms. We started with our social life and have now moved on to currency exchange and even purchasing household items and basic necessities. The COVID-19 pandemic has really done a number of real-life exchanges, hasn’t it?
Of course, however, wherever money flows, scams must follow and that is exactly how we approach the topic today: crypto-related cybercrime and the immense increase it has seen in 2021. The reasons for such a result are pretty obvious from the start, as as cryptocurrency becomes more popular and mainstream, people get better and better at making mistakes or exploiting them. Additionally, the more mainstream use of crypto has also legitimized it more as a true form of currency instead of the weird fixation of a wealthy enthusiast. As a result, more and more cybercriminals are incited to carry out attacks against people and their virtual wallets. A fairly common form these attacks take is the aptly named carpet pull.
The carpet draws are part of an attack on decentralized finance (DeFi). They basically boil down to a pretty big virtual scam; an individual or group will produce a pitch for a startup or a major business idea and then bring together investors for the process. They might even provide false documents and identification in the interest of maintaining an air of transparency and legitimacy. This last part isn’t even necessary for crypto, since the startup being launched is the currency itself. For example, a new virtual token is created. The token appears legitimate, as it is registered online (a fairly straightforward process to go through currently). Money is invested in it, after which the original developers completely drain the cash pool, exposing the scam. Currency market value collapses overnight, scammers
Read more: 2021 saw record number of double extortion ransomware attacks