2018 Saw Ethereum Scammers Double Their Profits: Chainalysis

According to a new report released by the Chainalysis on 23rd January, 2019, Ethereum (ETH) worth $36 million was stolen from crypto wallets by scamsters all through 2018. The numbers clearly paint a rather grim picture. What more does the report have to say?

The report tells us that 2018 saw a spate of scams that were far more complex and sophisticated than they had ever been before, yielding large amounts of profits to the scammers. According to the observations outlined in the report, Ethereum is frequently targeted by scammers, often more than any other cryptocurrency in the market.

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As it points out, the amount of Ethereum stolen in 2017 was worth just about $17 million but in 2018, the scammed amount rose to more than double that amount. Although the the absolute number of scams actually fell, the profit derived from the lower number went up by a huge margin.

The report reads:

“Ether has long been known as the cryptocurrency of choice for scams, for a variety of reasons, (which we dive into in our full report). From late 2016 through the end of 2018, Chainalysis has identified over 2,000 scam addresses on Ethereum that have received funds from nearly 40,000 unique users. Scam activity increased dramatically in 2018 with nearly 75% of scamming activity taking place that year. “

Of the various scams affecting ETH users, complicated ones like ICO exit scams or structurally complex Ponzi schemes managed to dupe more users than older types of attacks like phishing. Although the number of phishing cases did rise through 2018, they were not all that profitable to the scammers.

Explaining the change in the kind of scams affecting the ETH users, the report told us:

“In 2018, scamming activity shifted in two ways. First, after the success of phishing scams in 2017, many more criminals jumped on the bandwagon. They saturated the market with phishing attacks, but fewer users took the hook. As a result, phishing scams were much less effective than in previous years. In 2018, the median amount sent to a scam was around 50% less than in the prior year. A smaller group of innovative criminals executed more complex ponzi and ICO exit scams that generated millions of dollars in income. These more sophisticated schemes dominated the second half of the year. “

Clearly, the scammers are becoming smarter and better-equipped and it is time for the users to step up.

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