Top Crypto Scandals: FTX Crypto Scam and Other Notable Hacks in 2022

Top Crypto Scandals: FTX Crypto Scam and Other Notable Hacks in 2022

In recent years, we have seen an increase in high-profile incidents involving hacking and fraud in the cryptocurrency market, resulting in millions of dollars in losses for investors in 2022 alone. These events have raised concerns about the safety and stability of the crypto market and caused many to doubt the safety of their investments.

One notable example is trading platform and exchange FTX, which filed for bankruptcy in November 2022 after an investigation found CEO Sam Bankman-Fried had misused user funds, with an estimated loss of $1 billion to $2 billion in funds. user.

What happened to FTX Crypto?

The 2022 FTX Crypto Scam was a fraudulent scheme involving the FTX cryptocurrency exchange. There have been reports that the exchange cheated users by manipulating trading volume and prices on the platform, leading to significant financial losses for those affected. In addition, there were allegations of insider trading and other unethical practices. The scam was discovered by several prominent figures in the cryptocurrency community, and the exchange was eventually shut down by regulatory authorities. Many users were left out of pocket and the incident caused major damage to the reputation of the cryptocurrency industry as a whole.

Other major incidents include the Ronin network hack, in which $615 million in USDC and Ethereum was stolen in March 2022, the Wormhole crypto bridge that lost $320 million in Ethereum to hackers in February 2022, and the JuicyFields.io scam that resulted in earnings of 273 million dollars in losses for investors.

Data source: Miklos Zoltan, founder of privacyaffairs.com

What were the most popular crypto scams and hacks in 2022?

The chart below highlights the 11 biggest crypto scams and hacks of 2022, ranked by the amount of money (in USD) that was stolen or lost.

Top Crypto Scandals: FTX Crypto Scam and Other Notable Hacks in 2022

Where do these attacks come from?

Ranked below are the top cryptocurrency ecosystems that resulted in the largest dollar amounts lost.

Top Crypto Scandals: FTX Crypto Scam and Other Notable Hacks in 2022

The above statistics show that DeFi protocols have been the main target of hackers in the last two years, and a significant part of stolen money and cryptocurrency comes from these types of platforms. In 2021, DeFi protocols were the source of 72% of stolen funds, and 21% of all crypto hacks that year occurred by exploiting vulnerabilities in DeFi.

The trend continued in 2022, with 97% of all stolen cryptocurrencies acquired through the DeFi protocol. Additionally, the number of successful hacks and the amount of money stolen continued to grow, with an estimated loss of $1.4 billion from cross-chain bridge breaches alone.

The trend of major hacks and thefts from DeFi protocols is alarming and highlights the need to introduce enhanced security measures on these platforms.

Phishing is a common tactic used by hackers to steal personal information and private keys from individuals and businesses, which can then be used to steal cryptocurrency from their accounts. In the context of the DeFi protocol, phishing attacks target users of these platforms by tricking them into providing their private keys or personal information, such as their initial phrases or login credentials.

For example, a hacker can create a fake website or social media account that looks like a legitimate DeFi protocol, and then send phishing emails or messages to users, asking them to log in or provide their private key information. Once a user provides that information, a hacker can use it to steal their cryptocurrency or take over their account.

Phishing is a significant threat to the DeFi ecosystem as it can result in significant losses for individual users and companies holding large amounts of cryptocurrency. Recently, on January 3, 2023, a DeFi kit lost $3.4 million worth of GMX tokens to a phishing attack.

How to protect yourself from crypto phishing attacks

If you are a cryptocurrency foundation or a company operating directly in the industry, get ready for an exciting challenge! As the industry grows and evolves, you become an increasingly attractive target for malicious actors. Thieves will attack your brand, mercilessly stomping on your domain and setting up fake pages to deceive and cheat your customers.

To combat these threats, having solutions in place that can detect brand violations, phishing campaigns, and other fraud early before they can affect users and corporate infrastructure is critical. The detection of malicious activity must not only be fast, but must cover the entire Internet: from fake pages to fake social media accounts. Detection should also be paired with an automated takedown workflow that allows online crypto threats to be dealt with quickly.

One way to protect against cryptophishing attacks is to use a comprehensive platform like Bolster. Bolster offers effective protection across the web, social networks, app stores, and the dark web to combat fake sites and content globally.

Request a demo here.

*** This is a Security Bloggers Network syndicated blog from Bolster Blog authored by Bolster Research Labs. Read the original post at: https://bolster.ai/blog/ftx-crypto-scam/

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