According to a report by blockchain security firm CertiK, losses from hacks, exploits, and scams amounted to 32.2 million dollars in October. These losses were spread across 38 incidents, none of them resulting in a loss exceeding 7 million dollars. The decrease in losses for the month of October is not due to a steady decline, but rather to the absence of major incidents during this period.
Quarterly review of cryptocurrency-related incidents
According to CertiK’s third-quarter report, there were 79 incidents in July, 66 in August, and 39 in September. However, exploits reached their peak in September. Indeed, Mixin Network suffered a 200 million dollar loss when its cloud service provider was compromised. The month of July had also seen significant damage, primarily attributable to losses caused by the Multichain MPC bridge.
Social media platforms as vectors for scams
The combination of social media’s wide reach and decentralized nature creates an ideal environment for scammers. The report reveals that nearly half of all cryptocurrency-related scams were linked to social media platforms.
Variety of illicit activities on social media
These platforms offer various opportunities for illicit activities. They can range from pump-and-dump schemes to fraudulent practices such as “pig butchering”. Here are some examples of these activities:
Pump-and-dump: Groups orchestrate a rapid increase in the price of a cryptocurrency by encouraging members to buy massively. They sell their own shares when the price rises and then abandon the investment. This process causes losses for the other investors.
Pig butchering: Scammers pose as investment experts promising high returns with minimal risk. They lure their victims into a complex investment cycle while progressively stealing from them.
Impersonation scams: Use of fake profiles and well-known brands to deceive individuals and make them invest in fraudulent projects.
How to protect yourself against cryptocurrency scams?
To avoid falling victim to scams on social media, it is important to adopt a few precautionary measures. Here are some tips:
Verifying the authenticity of profiles and brands: Do not blindly trust individuals who contact you online. Check their web presence, reviews of their services, and the legitimacy of the projects they propose.
Thorough research into investment opportunities: Do not invest impulsively. Spend time studying the company, its credentials, its management team, and its business model.
Avoiding gains that are too good to be true: Beware of offers promising staggering returns with minimal risk. The reality is often very different.
Conclusion
The best way to protect yourself against scams in the cryptocurrency field is to stay informed and vigilant. By knowing the common practices of scammers, you will significantly reduce the risks of having to deal with losses. Finally, always remember that if an offer seems too good to be true, it probably isn’t true.
