Though Halloween night is over, scary things keep happening in the cryptocurrency space. We don't mean to spook you out, but did you know how many gullible users have lost millions of dollars to scammers and blockchain bucket shops in 2020? This hell of a year can throw us another curveball, so we want to save CoinLoaners from making a fatal mistake. Fake ICOs, Ponzi schemes, bitcoin recovery, fraudulent exchanges, giveaways, malware, video scams – sometimes scammer schemes are hard to detect. Be aware of the most typical scenarios, stay on the lookout for tricksters and con artists, and stick with reliable crypto projects! CoinLoan is proud to announce security has been the company's top priority since 2017. We don't trick-or-treat. But we know someone who does.
This terrifying slasher-movie-like case spread significant uncertainty and even fear on the internet. In mid-July, attackers gained access to the social network's internal control panel and promised to distribute cryptocurrency on behalf of celebrities. Among them were Elon Musk, Bill Gates, Barack Obama, and, what's more, several crypto businesses, including Binance.
The hackers made Twitter handles that closely mimic the verified accounts of well-known celebs to spread good old bitcoin scam. Users like @billgates, @johnmcafee, and @elonmusk announced they were "giving back" bitcoins to the community with a link to a fraudulent website. This trick has raised over $2 million in BTC as of June, according to bitcoinabuse.com. The experts noted that they found 66 cybercriminals' wallets, but there may be many more.
Only on July 30, 2020, two weeks after the incident, Twitter representatives officially confirmed that the attack on the social network resulted from the mistake of several company employees at once. It turned out that on July 15, 2020, scammers staged a phishing attack over the phone and used social engineering against employees. Netizens even said that in 2020, Twitter has turned into crypto-Twitter.
75 Exchanges Close
These exchanges were closed due to internal reasons, hacking, or the founders' fraud. Here are the most prominent cases.
Altsbit exchange was hacked on February 6, resulting in 6.929 BTC, 2.321 ETH, 1.066 KMD, 414.154 VRSC, 3924082 ARRR ($ 70.000) stolen. According to the exchange's Twitter page, on February 6, hackers managed to gain access to the trading platform's hot wallets overnight, allowing them to steal "almost all" of its funds. Using funds that Altsbit holds in cold wallets, the exchange will reimburse users for any remaining coins. The Italian marketplace soon announced it was closing. The site stopped working on May 8, 2020.
Singapore-based cryptocurrency exchange KuCoin reported a hack. Unknown attackers devastated the resource's hot wallets containing Bitcoin, ERC-20 tokens, and so on. KuCoin's total losses are approximately $150,000,000.
The hack was discovered on September 26, 2020, when exchange employees noticed large withdrawal transactions from hot wallets. The audit revealed a cyber attack and a lack of funds. The company said that the incident did not affect the cold wallets, and they promise to cover all the damage from the exchange's insurance fund.
The head of KuCoin, Johnny Lyu, assured that the company had already turned to law enforcement agencies for help. He said that the attack was most likely the work of someone from the exchange's employees or partners since the attacker somehow got hold of private keys to hot wallets.
KuCoin representatives have made a list of wallets to which the stolen funds were transferred (the list continues to be updated). Tether, Bitfinex, and several other major cryptocurrency exchanges have already blacklisted the attackers' wallet addresses and froze some of the funds on the EOS blockchain and one of the Ethereum addresses.
Experts Under The Breach note that hackers use the Uniswap decentralized exchange to convert stolen altcoins to Ethereum.
In turn, Whale Alert experts write that the hackers took almost 530,000 dollars in LINK tokens to an unknown address and exchange them for Ethereum through the Kyber Network decentralized exchange.
Cred Loss of Funds
We pay special attention to the case of the crypto lending platform Cred. Why were the funds lost and the users misled? Let's find out what happened.
It all started when Cred joined the Visa ecosystem. According to the CoinDesk report, shortly after, it notified its users of an incident requiring law enforcement intervention.
Cred representatives claim that the platform suffered from violations "in the process of handling certain corporate funds by the perpetrator of fraudulent activities." These losses negatively affected the balance sheet. The platform did not specify what amount is in question and did little to comfort the terrified users.
Law enforcement agencies are investigating the loss of funds. The company noted that it is conducting an internal audit and will submit a detailed report in November.
The withdrawal and crediting of funds under the CredEarn program has been suspended. The service has assured users that their data and other information have been safe. On the Twitter support account of Cred, customers complained about the lack of communication and timely updates.
Uphold trading platform, whose clients used the platform to make money on their assets, announced the termination of cooperation with Cred "for commercial reasons."
These scams happened before 2020. Nevertheless, be sure they fit the spirit of this crazy rodeo year.
OneCoin, founded in 2014, was presented as a revolutionary solution to financial problems. Many investors continued to invest in this Ponzi scheme even after cheated investors brought lawsuits against the organizers. OneCoin was founded by Dr.Rudzhi Ignatova, who disappeared from investors in 2017. The main idea behind OneCoin was the formation of a community whose members would believe in the prospects of cryptocurrency no matter what.
The US Prosecutor's Office believes that the creators of OneCoin received $ 4 billion from defrauded investors. According to other sources, the total amount of damage was 15.4 billion euros.
BitConnect, created in 2016, was a typical financial pyramid. The creators of Bitconnect promised investors up to 40% return on investment from the income that their trading robot can generate. Many famous members of the crypto community have warned investors about the insecurity of investing in Bitconnect. Despite intense criticism during 2017, the pyramid began to collapse only a year later. Experts estimated the level of damage from a startup at billions of dollars. In the spring of 2019, there were reports on the network about preparations for the launch of Bitconnect 2.0., But the project failed to repeat the success of its predecessor.
LoopX, a fraudulent project, appeared in 2017. Its representatives promised investors to profit from making money in the market using a trading algorithm they had created. The scammers held the LoopX ICO, during which they managed to raise $ 4.5 million. Later, the scammers disappeared with all the money, leaving investors with worthless project tokens.
If something seems to be too attractive to be true, then it is not true. Confidence or, better worded, the inconsistency of people who want to earn a lot of money, has made them steal this money. In this sense, the idea of creating fake giveaways and airdrops has long been considered a mainstream business.
As you can see, the crypto world is full of scammers, dubious projects, and other types of fraud, including scam altcoins, Ponzi schemes, ICO, and its derivatives. That is the reason why users should make sure a company works within the regulatory framework. We're proud to announce that CoinLoan has met all the Estonian regulators' new requirements and received a renewed European virtual currency provider license. We are among 104 trustable companies that complied with the updated guidelines so far, while almost 500 have outdated licenses.
It's up to you to decide who to work with. All we can do is provide CoinLoaners impeccable service and make sure our users don't fall for fraudulent schemes. If you've read up to this point, you are definitely on our fun-loving team. Take part in CoinLoan Halloween Competition and win one of seven cool prizes! No scams, no tricks, just treat!
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The information provided by CoinLoan (“we,” “us,” or “our”) in this text is for general informational purposes only. All investment and financial opinions expressed by CoinLoan in this text are from the personal research and open information sources and are intended as educational material. All outlined information is provided in good faith. However, we make no representation or warranty of any kind, express or implied, regarding the accuracy, adequacy, validity, reliability, availability, or completeness of any information in this text.