Crypto Hacks and Scams Rising Alarmingly in 2024

Blockchain security firm Immunefi recently highlighted in their Q2 2024 Crypto Losses Report that losses due to hacks doubled from $220 million in Q2 2023 to over $572 million in the same quarter this year. On the other hand, Bitget, a leading cryptocurrency exchange company, revealed a 245% increase in the number of deep fake crypto scams worldwide, with losses expected to surpass $25 billion in 2024.

In this piece, we highlight the major crypto losses and most targeted blockchains in Q2 of 2024, as well as the FBI's involvement in crypto crimes and scams.

Crypto scams doubled in Q2 2024

The year began positively for the cryptocurrency industry, with hacks and scams declining by 23% in Q1 compared to a similar period last year. This decline continued into April and early May but took a sharp upturn in late May when the biggest crypto hack of the second quarter was experienced.

On May 31st, a Japanese crypto exchange lost crypto worth more than $305 million after a hack compromised their private key. A month later, on June 22nd, BtcTurk, Turkey’s largest cryptocurrency exchange, was the target of a cyber attack that led to the loss of $55 million worth of cryptocurrency. Immunefi’s report indicated another successful but minor 53 crypto hacks between April and June 2024 that led to a loss of $564,238,811 in digital currencies.

The loss of crypto through hacks and scams is expected to continue thanks to the application of AI technology, as shared in Bitget’s research report. As a result, the crypto industry and government agencies, such as the FBI, encourage users to verify the information before committing to finances. Other industries prone to scams, such as the gambling sector, are also encouraging users to seek out credible online platforms and gambling news to be in the know.

Most targeted blockchains

Of the approximately $572 million lost in cryptocurrencies in Q2 2024, 70% was due to centralized exchange hacks. However, while centralized exchanges and protocols incurred considerably higher losses compared to decentralized protocols, it is important to note that the percentage of successful hacking attempts was higher on the decentralized platforms. Of the total number of recorded successful hacks, five assaults were on centralized exchanges, while 62 were on decentralized protocols.

During the Immunefi Q2 2024 Crypto Losses Report release, Mitchell Amador, Founder and CEO, stated, “This quarter highlights how infrastructure compromises can be the most devastating hacks in crypto, as a single compromise can lead to millions in damages. Robust measures to safeguard the entirety of the ecosystem are crucial.” Ethereum, BNB, and Arbitrum were the most targeted blockchains for hacking in Q2 2024. Of the crypto losses experienced, 46.6% were from Ethereum, 24.7% from BNB, and 15.5% from Arbitrum Chain.

Crypto Hacks accounted for 98.5% of the total crypto losses in Q2 2024, while scams accounted for only 1.5%. What’s more, 19 scams were successfully carried out in Q2 and were responsible for approximately $8,450,050 in crypto losses. While there has been a notable decrease in crypto scams, the industry can’t let its guard down as fraudsters have taken to posing as firms to help victims of crypto scams recover their digital assets to defraud them further as their latest tactics.

U.S. F.B.I ups bounty on crypto queen to $5 million

Through an alert shared on June 24th, 2024, the FBI raised an alarm to warn the public of an increased number of firms duping crypto scam victims by claiming to offer cryptocurrency recovery services. In the wake of these scams, the FBI has also renewed its efforts to crack down on crypto crimes. In a bid to bring to justice one of the most high-profile crypto scammers, the U.S. State Department officially increased the bounty of crypto queen Ruja Ignatova to $5 million on June 26th, 2024.

Ruja is believed to be the mastermind behind the infamous OneCoin crypto fraud that was exposed in 2017. The digital currency scam is believed to have defrauded victims of over $4 billion. The F.B.I. busted OneCoin, which claimed to be the “Bitcoin Killer” as a Ponzi scheme disguised as a cryptocurrency platform.

Working with Ruja Ignatova were Karl Sebastian Greenwood and Irina Dilkinska, who have been arrested. The crypto queen is believed to have faked her death to escape arrest. Ruja Ignatova, who is a Bulgarian-German, fled the U.S. to become a fugitive in Greece and later disappeared without a trace. The FBI believes that she is still alive. It hopes the public can share information to help arrest and convict her.

The face of crypto scams is quickly changing, with deep fake fraudsters employing AI technology to falsely imply the legitimacy of crypto projects. According to Bitget's report, the UK, USA, China, and German citizens are at the highest risk of crypto scams. These countries have experienced the highest rise of deep fake crypto scammers.

While the cryptocurrency industry shapers explore measures to counter crypto hacks and scams, the FBI urges the public to remain vigilant and do due diligence to establish legality and legitimacy before getting involved in crypto trade and crypto investment.