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Fraudulent crypto schemes are gaining pace from the last few years. These are different from the vulnerable ecosystem hacks the sector has previously witnessed. These acts involve individual psychology. In “traditional” attacks, malicious actors manipulate the code, while in frauds like “pig butchering” they manipulate the thinking of investor(s).
Fake Exchanges Stealing Investors’ Fund
The Washington Post reports that US officials have unveiled these pig butchering frauds reported by the victims in November 2022 court filings. The subjects falling into these traps have lost millions of dollars to the attacks. 5 people, unaware of its authenticity, invested their funds in a fake crypto exchange dubbed Singapore International Monetary Exchange. The developers had created a mobile trading app which appeared genuine to them, creating a sense of trustworthiness.
One of the victims lost $289K while another individual reported a loss of $200K. A Redmond-based trader says she invested $2.8 Million in the exchange. It showed a profit of $7 Million before all of it disappeared with her funds. She tried to withdraw the funds but was denied by the fake “exchange”.
Pig Butchering frauds resemble a ritual where a subject is fattened before the slaughter. Hackers often develop close relationships disguising as friends or even a love interest with potential investors. They try to gain trust of the individual(s) and steadily chop off their hands to steal their hard-earned money.
Malevolent acts in the crypto sector are rising feverishly since it caught the eyes of investors in 2021 and non-fungible token space is no exception. Recently, a firewall protocol dubbed Harpie, identified a malicious act on OpenSea, the biggest NFT platform. Attackers were trying to steal their assets using hostile links disguised as private auctions.
The hacker sent those links asking the users for a signature login, where in reality the individual was agreeing to a request to transfer their digital asset for 0 ETH. Luckily, the on-chain protocol identified this attack and took to Twitter to reveal it. According to Harpie, the malevolent act led Millions worth of Apes lost to the attack.
Regulators are trying to keep any unethical activities from the investors too. Recently, The Guardian reported that the federal court has banned a company disguising as The Pokemon Company International (TPCI) partners. They were reportedly planning to release NFT and a crypto game in 2023.
Investors’ trust in the cryptocurrency sector is declining due to market downturn and some unfortunate events leading exchanges towards insolvency. Potential threats in the space will only give the trust a little push down the slope. People trying to invest in a project need to take a closer look to verify its authenticity. Moreover, developers should take measures to ensure their project remains unique as far as the user can easily identify a fake project resembling the original while exploring the sector.
Anurag is working as a fundamental writer for The Coin Republic since 2021. He likes to exercise his curious muscles and research deep into a topic. Though he covers various aspects of the crypto industry, he is quite passionate about the Web3, NFTs, Gaming, and Metaverse, and envisions them as the future of the (digital) economy. A reader & writer at heart, he calls himself an “average guitar player” and a fun footballer.
