Australia reported a rise of over 162% in crypto scams, and the total money lost by investors to such scammers amounted to $148.3 million.

Crypto Users Lost $23.4 Million to Hacks and Fraud in August

  • Exactly Protocol suffered the biggest loss in August.
  • Five of the 21 recorded hacks occurred on the Ethereum blockchain.

A new report by blockchain security firm Immunifi shows that crypto users lost about $15.8 million to hacks and exploits in August alone. The report, which was released on Thursday, August 31, revealed that a combined $23.4 million was lost to hacking and fraud in August, which is a considerable drop from the $320.5 million recorded in July. Interestingly, all the attacks noted in August were aimed at decentralized finance (DeFi) protocols.

Immunify reported that the Ethereum blockchain experienced the biggest attack in August. Five of the 21 recorded security breaches happened on the Ethereum blockchain, while the BNB Chain only accounted for four of the incidents. In addition, Coinbase‘s new service, Base, experienced four security breaches in August.

The Exactly protocol incurred the largest losses in August. The protocol suffered an attack on August 18, which wiped off Eth tokens worth $7.2 million. According to Immunefi, users have lost $1.25 billion in cryptocurrency so far this year as a result of hacks and fraudulent activity.

Law enforcement agencies such as the Federal Investigation Bureau (FBI) have issued several warnings against crypto-based scams. Crypto hackers and scammers employ different tactics to carry out their attacks, including posing as recovery companies that can help crypto fraud victims recover their stolen funds.

The FBI noted that $2.5 billion was lost to crypto investment fraud in 2022 alone. This large pool of victims has become easy targets for scam recovery companies, which leverage the desperation of their victims to recover their stolen funds and defraud them a second time.

According to the FBI notice:

Representatives of fraudulent businesses claiming to provide cryptocurrency tracing and promising the ability to recover lost funds may contact victims directly on social media or messaging platforms. Victims may also encounter advertisements for fraudulent cryptocurrency recovery services in the comment sections of online news articles and videos about cryptocurrency; among online search results for cryptocurrency, or on social media.

Recovery scams, according to the FBI, are designed to trick people into paying for the costs of the alleged recovery by demanding an advance fee or some other type of deposit.

After receiving the money, the scammers either stop communicating with the victims or attempt to get more money by delivering an unfinished trace report and claiming they need more money to finish it.

The FBI observed that scammers sometimes claim to be associated with reputable law enforcement or other groups to give their targets a sense of reliability.

The FBI advises against trusting cryptocurrency recovery services advertised on social media. In addition, no reputable organization will request personal or financial details.

Lawrence Woriji Verified

Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.

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