Major Crypto Scandals: FTX Crypto Scam and Other Major Hacks in 2022

Major Crypto Scandals: FTX Crypto Scam and Other Major Hacks in 2022

Recent years have seen an increase in high-profile incidents involving hacking and scams in the cryptocurrency market, resulting in millions of dollars in losses for investors in 2022 alone. These events have led to concerns over the security and stability of the market of cryptocurrencies and have caused many to question the safety of their investments.

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

What happened with FTX Crypto?

The FTX Crypto Scam of 2022 was a fraudulent scheme involving the FTX cryptocurrency exchange. Reports surfaced that the exchange had duped users by manipulating trading volumes and prices on the platform, leading to significant financial losses for those affected. Additionally, there have also been allegations of insider trading and other unethical practices. The scam was exposed by several prominent figures in the cryptocurrency community and the exchange was eventually shut down by regulators. Many users were left without money, and the incident caused widespread damage to the reputation of the cryptocurrency industry as a whole.

Other notable incidents include the Ronin Network hack, in which $615 million worth of USDC and Ethereum were stolen in March 2022, crypto bridge Wormhole losing $320 million worth of Ethereum to a hack in February 2022, and the JuicyFields.io scam which resulted in $273 million in investor losses.

Data source: Miklos Zoltan, founder of privacyaffairs.com

What were the top scams and cyber attacks in 2022?

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

Major Crypto Scandals: FTX Crypto Scam and Other Major Hacks in 2022

Where are these attacks coming from?

The top cryptocurrency ecosystems that resulted in the highest loss of dollars are ranked below.

Major Crypto Scandals: FTX Crypto Scam and Other Major Hacks in 2022

The statistics provided indicate that DeFi protocols have been a major target for hackers over the past couple of years, with a significant portion of stolen money and cryptocurrency coming 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 being acquired by DeFi protocols. Additionally, the number of successful hacks and the amount of money stolen continued to rise, with an estimated $1.4 billion in losses from cross-chain bridge breaches alone.

The trend of large-scale hacks and thefts from DeFi protocols is alarming and underlines the need to implement more security measures in 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 DeFi protocols, phishing attacks target users of these platforms by tricking them into revealing their private keys or personal information, such as their seed phrases or login credentials.

For example, a hacker could create a fake website or social media account that looks like a legitimate DeFi protocol, then send phishing emails or messages to users, asking them to log in or provide their private key information. Once the user provides this information, the hacker can then 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 both individual users and companies holding large amounts of cryptocurrency. Just recently, on January 3, 2023, a DeFi whale lost $3.4 million worth of GMX tokens due to a phishing attack.

How to protect yourself from crypto phishing attacks

If you are a foundation or a cryptocurrency company directly operating in the sector, get ready for an exciting challenge! As the industry grows and evolves, you’re becoming an increasingly attractive target for bad actors. Thieves will attack your brand, mercilessly trampling your domain and creating fake sites to deceive and scam your customers.

To combat these threats, it’s critical to have solutions that detect brand infringements, phishing campaigns, and other scams early, before they impact users and corporate infrastructure. Detection of malicious activity must be not only fast, but scalable to the entire Internet – from fake sites to fake social media accounts. Detection should also be paired with an automated removal workflow that allows for quick resolution of online crypto threats.

One way to protect yourself from crypto phishing attacks is to use a comprehensive platform like Bolster. Bolster offers efficient web, social media, app store, and dark web protection to combat fake sites and content globally.

Request a demo here.

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

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