Cryptocurrency related scams rose by 81% across 2021, with rug pulls being a very common and incredibly damaging form of cybercrime, reports Chainalysis.
2021 has been an incredible year of growth for cryptocurrency, truly legitimizing the virtual exchange medium in a number of different ways. Other than currencies such as Bitcoin and Ethereum becoming a bit more accessible, if not completely commonplace, many other forms have started taking shape online. Platforms such as Patreon and Facebook have even started working towards developing and integrating their own line of crypto exchange, while also allowing for compatibility with some already-established currencies. Many other varieties of virtual exchange have also started popping up in the face of a rising interest in cryptocurrency, even if they haven’t received the same enthusiastic response (looking at you, NTFs). Overall, it’s interesting to see just how the world is going all-in on further moving day to day practices towards more virtual spaces and platforms. We started with our social lives, and have now gone down to currency exchange and even the purchase of basic household goods and necessities. The COVID-19 pandemic really did a number of real life exchanges, didn’t it?
Of course, however, wherever money flows scams must follow and that is exactly how we get to today’s subject: crypto-related cybercrime and the immense increase it saw across 2021. The reasons for such an upshot are rather obvious from the get-go, since as crypto-currency becomes more popular and mainstream, people get better and better at either making mistakes or exploiting them. Furthermore, crypto’s more mainstream usage has also legitimized it further as a true form of currency instead of a rich hobbyist’s weird fixation. Therefore, more and more cybercriminals are incentivized to conduct attacks against people and their virtual wallets. A rather common form that these attacks take is the aptly named rug pull.
Rug pulls are part of an attack against decentralized finance (DeFi). They essentially boil down to a rather large virtual scam; some individual or group will produce a pitch for a startup or major business idea and will then gather investors for the process. They might even provide fake documentation and IDs in the interest of maintaining an air of transparency and legitimacy. That last part isn’t even necessary for crypto, since the startup being pitched is the currency itself. For example, a new virtual token is created. The token looks legitimate, since it is registered online (a fairly easy process to currently go through). Money is invested in it, after which the original developers completely drain the liquidity pool, thus exposing the scam. The currency’s market value crashes overnight, the scammers
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2021 has been an incredible year of growth for cryptocurrency, truly legitimizing the virtual exchange medium in a number of different ways. Other than currencies such as Bitcoin and Ethereum becoming a bit more accessible, if not completely commonplace, many other forms have started taking shape online. Platforms such as Patreon and Facebook have even started working towards developing and integrating their own line of crypto exchange, while also allowing for compatibility with some already-established currencies. Many other varieties of virtual exchange have also started popping up in the face of a rising interest in cryptocurrency, even if they haven’t received the same enthusiastic response (looking at you, NTFs). Overall, it’s interesting to see just how the world is going all-in on further moving day to day practices towards more virtual spaces and platforms. We started with our social lives, and have now gone down to currency exchange and even the purchase of basic household goods and necessities. The COVID-19 pandemic really did a number of real life exchanges, didn’t it?
Of course, however, wherever money flows scams must follow and that is exactly how we get to today’s subject: crypto-related cybercrime and the immense increase it saw across 2021. The reasons for such an upshot are rather obvious from the get-go, since as crypto-currency becomes more popular and mainstream, people get better and better at either making mistakes or exploiting them. Furthermore, crypto’s more mainstream usage has also legitimized it further as a true form of currency instead of a rich hobbyist’s weird fixation. Therefore, more and more cybercriminals are incentivized to conduct attacks against people and their virtual wallets. A rather common form that these attacks take is the aptly named rug pull.
Rug pulls are part of an attack against decentralized finance (DeFi). They essentially boil down to a rather large virtual scam; some individual or group will produce a pitch for a startup or major business idea and will then gather investors for the process. They might even provide fake documentation and IDs in the interest of maintaining an air of transparency and legitimacy. That last part isn’t even necessary for crypto, since the startup being pitched is the currency itself. For example, a new virtual token is created. The token looks legitimate, since it is registered online (a fairly easy process to currently go through). Money is invested in it, after which the original developers completely drain the liquidity pool, thus exposing the scam. The currency’s market value crashes overnight, the scammers