Crypto crimes are on the rise, and a man who lost $120,000 after clicking one bad link shows how vulnerable investors are right now.
Reddit user PowerofTheGods said he had been investing since 2016 and kept his investments in a Ledger Nano S (a crypto wallet) and four Metamask digital hot wallets. When he checked his accounts last December, he noticed they were empty. At the time, the currency was valued at more than $120,000.
He later realized that hackers stole his crypto after he clicked one bad link.
His story is becoming increasingly common. In 2021, criminals stole $14 billion in cryptocurrency, a 79% increase from the previous year, according to a recent Fortune story.
Crypto horror story goes viral
The man who lost $120,000 recently went viral by sharing his story on Reddit’s r/Cryptocurrency thread.
PowerOfTheGods wrote he believes he lost his investment after clicking on a malicious link while web surfing. While his ledger was unlocked, a Trojan took control of his browser and wiped his wallet in a matter of minutes.
While the user reported the alleged crime to the authorities, there was nothing they could do because cryptocurrency is still largely unregulated. After he shared his story on Reddit, he found other users who reported similar experiences.
How crypto scammers attack
In addition to targeting crypto users with bad links, criminals are using other scams to steal currency.
“Rugpulls” are an increasingly common scam where crypto developers push a new project to investors and disappear with millions of dollars. In 2021, this accounted for 37% of all cryptocurrencies scams, a jump from 1% the previous year.
Pulling out these types of scams is relatively easy, which is why it has become so popular. New tokens can be created on Ethereum or another blockchain, and can then be listed on peer-to-peer marketplaces or decentralized exchanges.
How to stay safe as a crypto investor
- Keep an eye open for scammers. If a deal seems too good to be true, it probably is.
- Don’t open any links or attachments that look suspicious.
- Enable two-factor authentication for online accounts.
- Look at the 24-hour trading volume of cryptocurrencies to assess the liquidity.
- Stay informed, and read up on crypto before you make any decisions.
Crypto regulation is on the way
This week, President Biden is expected to sign an executive order directing agencies like the Treasury and the Justice Department to look into the ramifications of creating a U.S. central bank for digital currencies. They will also explore whether a new law is needed to create a currency, according to Reuters.
The order will also outline policies and regulations for the cryptocurrency market. The order will also ensure that American cryptocurrency laws align with those of U.S. allies, and will task the Financial Stability Oversight Council to investigate any financial concerns, according to the Associated Press.
In 180 days, we could see a shift in policy that could take the country a step closer to creating a central digital currency bank, or a delay should this move require congressional approval.
This order comes amid increasing concern that Russian elites will use cryptocurrencies to work around Western sanctions that have cut off Russia from the global economy. There is also concern that China will create its own cryptocurrency.
On Monday, the Financial Crimes Enforcement Network warned financial institutions to watch Russian entities trying to avoid sanctions.
