Ether Scammers Doubled Their 2017 Profits in 2018: Report

Ethereum

Ether Scammers Doubled Their 2017 Profits in 2018: Report

A new report released by blockchain research firm Chainalysis has revealed that the value of ether extracted by crypto scammers in 2018 was more than twice the amount harvested in 2017. According to the report, cybercriminals made away with $36 million worth of ether through various swindles in 2018, as against $17 million in 2017.

Unlike hackers who utilise cryptojacking malware, phishing, ransomware and other types of malicious attacks to exploit user system weaknesses and steal or extort cryptocurrency, this class of attackers operates in the more time-honoured fashion of internet scams – convincing people to voluntarily hand over money that will supposedly be used for a purpose which turns out to be a lie.

The report states that more than 40,000 people fell victim to these scams in 2018, which is more than four times the number of people scammed in 2017. More than 2,000 fraudulent wallet addresses were also identified as the scams continue to grow in scope and sophistication.

Ponzi Schemes and Fake Investments

The report reveals that by far the most profitable ether scam conducted in 2018 was the pyramid scheme, in which ether holders are contacted by fraudsters asking for a donation of a specific amount that will be rapid with a specific amount of guaranteed interest. As with all Ponzi schemes, the first few users do indeed receive the promised funds, which incentivises them to recruit more victims and help the scheme cycle up until the fraudsters controlling the pyramid pull out the money and disappear.

This scenario played to several times in 2018, most notably with 333 ETH, which reaped about $3.5 million in ETH. The Ethereum DApp, which promised users daily returns of 3.33 percent on a fixed buy-in amount achieved significant popularity despite being repeatedly identified as a scam. Eventually, the Russian-owned platform was shut down and the scammers melted into thin air as per their usual custom.

Apart from Ponzi schemes, cybercriminals also cashed in on the smouldering embers of the ICO craze to harvest large ETH sums. While 2018 was not quite the bumper year for ICOs that 2017 was, investor still retained a heightened interest in token sales and some criminals took advantage of this by creating a plethora of cryptocurrencies, accompanied by whitepapers, roadmpas and marketing campaigns. When investors bought into these ICOs using ETH as was the typical ICO practise, the scammers then transferred the funds to wallets they controlled and pulled the plug on the websites and social media assets, in what is now knows as the classic exit scam.

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Ether Scammers Doubled Their 2017 Profits in 2018: Report
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Ether Scammers Doubled Their 2017 Profits in 2018: Report
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A new report released by blockchain research firm Chainalysis has revealed that the value of ether extracted by crypto scammers in 2018 was more than twice the amount harvested in 2017. According to the report, cybercriminals made away with $36 million worth of ether through various swindles in 2018, as against $17 million in 2017.
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Author: David Hundeyin

I am a busy writer and journalist with an interest in tech and finance. When I’m not writing and traveling around Africa, you can sometimes catch me in the writers room at ‘The Other News’, Nigeria’s weekly answer to ‘The Daily Show’ with nearly 2 million viewers. My work on ‘The Other News’ has been featured in the New Yorker Magazine. I have been nominated by the US State Department to take part in the 2019 Edward R. Murrow Program for journalists under the International Visitors Leadership Program.

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David Hundeyin 13 Articles

I am a busy writer and journalist with an interest in tech and finance. When I’m not writing and traveling around Africa, you can sometimes catch me in the writers room at ‘The Other News’, Nigeria’s weekly answer to ‘The Daily Show’ with nearly 2 million viewers. My work on ‘The Other News’ has been featured in the New Yorker Magazine. I have been nominated by the US State Department to take part in the 2019 Edward R. Murrow Program for journalists under the International Visitors Leadership Program.