Cockroach-Esque Ethereum Scams Thrive Amid Crypto Winter

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Just like cockroaches are have rumored to have survived the nuclear blasts of yesteryear, Ethereum (ETH) scammers are as prevalent as ever, even as the crypto (nuclear) winter nips at the extremities of the Bitcoin ecosystem.

Ethereum Scams Net $36M In 2018 

According to leading blockchain research unit Chainalysis, a mainstay in the crypto analytics sector, Ethereum scams continued to net malicious actors hefty bags amid 2018’s (what can only be described as dismal) market downturn. In its report, the Manhattan, New York-based company noted that a mere 0.01% of all ETH was stolen in 2018.

While such a sum may seem dismally puny, 0.01% of all of the third most valuable cryptocurrency amounts to $36 million in value, no small value. Interestingly, this value is 110% that stolen by swindlers in 2017, indicating that bad actors are as present than ever in this still lucrative, yet illegal hustle.

This $36 million in stolen Ether, originating from 40,000 “unique users,” was purportedly routed through 2,000 addresses. Per Chainalysis’ deep dives into the addresses, including the vectors of attack that scammers employed, Ponzi schemes, ICO exit scams, and pure scams (look at the once-incessant number of Twitter bots) were overshadowed by the role that phishing played, with such attacks amounting to 38.7% of 2018’s Ethereum scams by ETH volume.

Yet, ICO exit scams and Ponzi schemes were also a notable trend through the year prior. Case in point, according to an exposing tweet from Korean Cryptocurrency & Blockchain News, a South Korean source, one exchange pulled a massive scam in November.

Per the source’s report, Pure Bit, an ICO-funded startup “aimed” at launched a Bitcoin exchange, had reportedly received over 13,000 Ether (now valued at $15 million) in anticipation for the platform. Yet, once the project’s pre-sale concluded, the company’s heads began routing the holdings to their personal wallets, while also purging Pure Bit’s social media pages.

At the same time, Pure Bit’s website was rapidly taken down, with visitors then being greeted with only a “this site is inaccessible” message. No more, no less.

As hinted at earlier, this case is just one in a line of dozens, if not hundreds that have befallen crypto’s ‘common Joe’ consumers during 2018. Ouch.

Bad Actors Make Bank Amid Bitcoin Crash

This recent Chainalysis report comes just over a week after Cryptopia, a New Zealand-based crypto platform centered around lesser-known altcoins, fell victim to a purportedly devastating hack. Per previous reports from Live Coin Watch, the exchange, headquartered and run out of Christchurch, was hacked on January 13th/14th for a total of $16 million in Ether and ERC-20 tokens.

$3.57 million of the sum was in ETH, $2.446 million in Dentacoin, $1.948 million in Oyster Pearl, and the list goes on. Other prominent tokens, including TrueUSD, OmiseGO, Sirin Labs, ZRX, and Augur’s REP, were also stolen from Cryptopia’s not so impenetrable system. It is assumed that the attackers made it out with other cryptocurrencies, including BTC, but this claim hasn’t been verified.

So, it seems that crypto’s bad actors have continued to make bank, even amid the extended, drawn-out crash in the value of Bitcoin.

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