Hackers stole $4.3 billion worth of cryptocurrency in 2022, making it the worst year on record for crypto fraud. While the government pushes for regulation in the digital coin market, cryptocurrency remains a volatile industry and a risky bet for investors and financial institutions.
While decentralized finance (DeFi) aims to offer greater control to investors, the anonymous nature of banking on the blockchain provides cyber criminals with the smoke and mirrors they need to steal money and vanish without a trace.
But despite the threats, global crypto adoption rates continue to grow — 22% of U.S. adults own cryptocurrency. And so, the onus is on software developers and security teams to step up their efforts to combat cryptocurrency fraud and protect investors. But that’s easier said than done.
How cryptocurrency fraud has grown
Blockchain — the underlying technology behind cryptocurrency — is built on the foundational principles of immutability. The concept is that nobody should be able to steal your money from an encrypted vault. But unfortunately, the reality is an industry riddled with security flaws.
Hackers have a vast arsenal of sophisticated technologies and techniques to infiltrate financial institutions and digital wallets. In its annual Internet Crime Report, the FBI revealed cryptocurrency investment fraud had grown almost three-fold from 2021 to 2022.
Here are five of the most common types of cryptocurrency fraud:
Ponzi schemes lure unsuspecting victims by making promises of high returns with little or no risk. But when people stop investing, the scheme collapses and the operator ..
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