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Whale Alert Analysis: Scammers Have Bagged Bitcoin Worth $24 Million in the First Half of 2020

Leading blockchain tracking and analytics provider Whale Alert has revealed that scammers have been on a stealing spree as they have made away with $24 million in Bitcoin so far in 2020. Cumulatively, they have siphoned Bitcoin valued at $38 million over the last four years, and this excludes Ponzi schemes as they are a billion-dollar sector on their own.

Over $130,000 gone in a day

Scammers have perfected their art as some of them are looting more than $130,000 in just a day, and all they need is vigorous YouTube advertising, a bitcoin address, and a single-page website.

As per the report, “So far we have been able to confirm 38 million US dollar in bitcoin alone stolen by scammers over the past 4 years (excluding Ponzi schemes, which are a billion-dollar industry on their own), 24 million of which during the first 6 months of 2020. Some of the most successful scams made over $130,000 in a single day.”

Some swindlers are presenting fake crypto exchanges with unsuspecting investors getting lured. For instance, one scammer has been able to rake in at least $1.5 million in 6 months by offering a fraudulent exchange consisting of an amateur website with numerous grammatical mistakes.

Some scammers have, however, not been so lucky as they have been nabbed. Recently. A Romanian programmer who orchestrated the BitClub Network, which siphoned off investors’ funds worth $722 million, admitted to being a key player in the scam and may face a maximum five-year sentence and a $250,000 fine.

Supernormal profits

The scam market is depicted by high revenue, zero risk, minimal effort, and no taxes. Whale Alert predicts that by the end of this year, it will have skyrocketed by over twenty-fold since 2017 as the annual revenue will stand at more than $50 million.

Figure: Total Scam Revenue Per Year (Until the First Half of 2020, Excluding Ponzi Schemes)

This growth is being driven by elevated aggressiveness and professionalism because the scam industry began with the sending of malware and sextortion emails. Nevertheless, it has become sophisticated that scammers are establishing fake enterprises with dozens of websites, fraudulent social media accounts, and round the clock “customer support.”

According to the announcement, “The most prominent type of scam at the moment is the Giveaway, which features either a celebrity like Elon Musk or a well-known exchange and can net between a few thousand and 300,000 US dollars depending on the skill and effort put in by the scammers.”

The numerous crypto scams are taking place as Bitcoin trading hit a six-month low of 51% characterized by a snail speed in June 2020.

UK’s Financial Watchdog Warns of Fraudsters Impersonating Blockchain.com

The Financial Conduct Authority (FCA) mandated with regulating the UK’s financial market has raised the alarm about fraudsters who want to lure the public using a cloned version of Blockchain.com, a crypto wallet and trading company. The swindlers are using Blockchain Ltd when cold calling people that they work for the genuine firm.

Deceit at play

Fraudsters in the crypto space have become sophisticated to the extent of establishing fake enterprises with dozens of websites, fraudulent social media accounts, and round the clock customer support.

In July, Whale Alert disclosed that scammers had been on a stealing spree as they had made away with Bitcoin worth $24 million in the first half of 2020. The leading blockchain tracking and analytics provider noted that this growth was being driven by elevated aggressiveness and professionalism because the scam industry began with the sending of malware and sextortion emails.

By cloning Blockchain.com, these fraudsters intend to lure the unsuspecting public into their trap. The FCA warned:

“Fraudsters are using the details of firms we authorise to try to convince people that they work for a genuine, authorised firm.”

The two firms are not correlated

The financial watchdog stated that Blockchain.com and Blockchain Ltd are not the same, and this was a technique used by scammers to deceit people without a keen eye who cannot note the difference. The report affirmed:

“Be aware that scammers may give out other false details or mix these with some correct details of the registered firm. They may change contact details over time to new email addresses, telephone numbers or physical addresses.”

In September, the European Union (EU) Parliament revealed that it was considering establishing a restitution fund for crypto fraud victims after a petition was filed by a consortium of individuals, organizations, and companies. The objective of the petition was to seek the establishment of a restitution fund for victims of crypto fraud.

Scammers Target NFT Users in BLUR Token Airdrop Scam

Scammers are targeting non-fungible token (NFT) users by promoting fake airdrop links to claim BLUR tokens on malicious websites. According to TrustCheck, scammers have stolen over $300,000 in Ether from unsuspecting users who linked their wallets to these fake websites.

The BLUR platform is a newcomer to the NFT marketplace and has been gaining popularity with its three-phase airdrop incentive scheme. Users have been receiving tokens based on their trading activity on the platform. The second airdrop scheme distributed 10% of the total BLUR token supply to users who traded NFTs on Ethereum. The first airdrop was retroactive, awarding tokens to anyone who traded an NFT in the six months leading up to the platform’s launch, while the third airdrop rewarded users who placed bids on the platform.

The incentive program has created an opportunity for scammers to prey on users looking to claim BLUR tokens across the NFT ecosystem. These fake websites use smart contracts that automatically prompt transactions when users connect their Ether wallets. All the Ether from the wallet is then drained to a specific address. TrustCheck has been keeping tabs on the number of funds stolen by flagging suspicious websites and transactions, warning Web3 users of potential fake websites and smart contracts.

Despite reports of NFT wash trading, data analytics suggest that BLUR’s NFT trading volumes are legitimate. Scammers continue to drain funds through Web3 functionality, as phishing attacks and fake websites are commonplace across the internet. In February 2023, a phishing wallet address linked to a URL masquerading as the ETHDenver conference website has stolen over $300,000 to date. In late 2022, scammers targeted FTX investors through phishing websites after the failed cryptocurrency exchange’s implosion.

It is crucial for NFT users to be vigilant and cautious when dealing with token airdrops and to ensure that they only connect their wallets to legitimate websites. Tools like TrustCheck can help users identify suspicious websites and transactions, but ultimately, it is up to individuals to protect their funds and stay informed of potential scams.

Scammers Involved in Uniswap Founder's Twitter Account Hack Stole $3.6M from Victims

In a recent cybersecurity incident, the Twitter account of Uniswap founder Hayden Adams (@haydenzadams) was hacked by scammers who have reportedly been active since April 2023. The perpetrators have created over 23 phishing sites in the past few months, resulting in the theft of approximately $3.6 million from around 358 victims.

One of the most significant cases occurred on May 1, 2023, when a user lost $2.28 million worth of USDC due to an ERC20 Permit phishing attack.

The official Uniswap Twitter account issued a warning a few hours ago, stating, “@haydenzadams’ Twitter account has been hacked. Please do not click on any links. There is no giveaway, airdrop, or bounty. The Protocol has not been hacked or exploited.”

Hayden Adams later regained control of his Twitter account and expressed his gratitude to those who assisted during the incident. He tweeted, “In control of my twitter again. Appreciate everyone who helped out tonight, and the effort people put in to help with takedowns, warnings, etc.”

This incident serves as a reminder of the persistent cybersecurity threats in the crypto space. Users are advised to exercise caution when clicking on links, especially those promising giveaways, airdrops, or bounties. Always verify the information from official sources and use secure and trusted platforms for crypto transactions.