Crypto Scams Continue to Plague the Industry

Despite ongoing efforts to enhance security, the crypto industry remains vulnerable to malicious activities. In February alone, crypto scams and hacks resulted in losses exceeding $160 million.

Exploits and Vulnerabilities

Exploits of vulnerabilities in crypto projects accounted for the majority of February’s losses, amounting to approximately $101 million. Notably, Certik reported several instances of exploits throughout the month, including:

  • Seneca USD: Exploited for $3 million
  • PlayDapp: $32.35 million stolen
  • Fixed Float: $26 million lost
  • Jihoz.Run: $9.7 million exploited
  • DuelBits: $4.66 million stolen

Exit Scams

February also witnessed a surge in exit scams, where developers abscond with investors’ funds after raising significant amounts of money. BitForex, a Hong Kong-based exchange, was responsible for the majority of these scams, with $56.5 million withdrawn from its hot wallets.

Flash Loans

Losses from flash loans, where funds are borrowed and exploited without collateral, decreased significantly in February to $138,000.

Can the Crypto Industry Eradicate Scams?

While cryptocurrencies offer anonymity, it also poses challenges in combating hacks and thefts. Despite security measures, attackers have become more sophisticated and organized. However, recent reports indicate a decline in scams and exploits over the past year, with losses dropping from $39.6 billion in 2022 to $24.2 billion in 2023.