Crypto fraud soars 58% to £226m in past year as fraudsters cash in: Here’s how to protect yourself from Bitcoin thugs
- Fraud related to digital currency scams increased by 58%.
- Victims typically lose £36,250 to crypto scams, according to data research
- Phishing emails or text messages convince victims to invest fake funds in cryptocurrency
- Some encourage victims to click on links or download software that hides malware
Cybercriminals are increasingly using interest in cryptocurrencies to defraud speculators and prey on British pension banks, new research has revealed.
According to cyber security company NordVPN, the profits of crypto scammers have almost doubled in the last 12 months.
Total losses from UK investment fraud using fake digital currencies, websites, apps or funds rose to more than £226m in the year to May 2022 – up from £143m lost in the 12 months before.
Bitcoin Thugs: Latest Digital Currency Scam Data Shows 58% Year-On-Year Rise in Money Stolen
Fraudsters have already made £118m this year and are currently pocketing £36,250 per scam.
As cryptocurrencies are not regulated by the UK’s Financial Conduct Authority, it becomes easier for criminals to lure Britons into bogus investment and pension schemes with the promise of above-market returns.
These fake schemes seem to have become more profitable for scammers, despite the fact that much of the cryptocurrency market has collapsed over the past six months.
The two biggest names, Bitcoin and Ethereum, are down 48 and 62 percent respectively since the start of the year – as of July 8.
However, while the amount of theft is on the rise, this year’s figures show only a slight increase in the number of reported incidents, suggesting that criminals may be profiling victims to get more out of their scams.
|The moon||Scope of the report||Financial losses||Losses per incident|
|June 2021||875||£20,275,547||23,172 lbs|
|August 2021||738||£13,336,233||18,071 pounds|
|September 2021||668||£14,207,558||21,269 lbs|
|October 2021||808||£15,623,715||19,336 lbs|
|November 2021||815||£16,662,324||20,445 lbs|
|December 2021||783||15,661,991 lbs||20,003 lbs|
|January 2022||1040||£19,158,977||18,422 lbs|
|February 2022||900||£15,225,636||16,917 lbs|
|March 2022||936||£37,698,663||40,276 lbs|
|April 2022||892||£12,908,057||14,471 lbs|
|May 2022||911||£33,024,379||36,251 lbs|
Marius Briedis, CTO and digital privacy expert at NordVPN, said: “With inflation skyrocketing and traditional savings rates failing, fake crypto investment schemes offering the prospect of high returns are perfect bait for fraudsters.
“These scams are thriving despite the huge collapse in Bitcoin and other currencies and, worryingly, the apparent increase in the amounts stolen per scam shows that fraudsters are getting better at defrauding their victims.
“With the vast amounts of personal and financial information being traded on the Dark Web, it may be that hackers are now a special target for hackers.”
How does it work?
Often the schemes will be advertised on social media using fake celebrity endorsements from respected financial experts such as Martin Lewis or the stars of TV investment show Dragons’ Den.
Hackers can also use phishing emails or text messages to convince victims to invest in a non-existent cryptocurrency fund through a fake website, or to trick them into clicking a link or downloading a program that contains malware.
It can then infect their devices and steal data or drain money from online accounts.
Cybercriminals’ success in promoting fake schemes has come despite the collapse of cryptography.
Malibot, a new highly aggressive form of malware that targets devices running the Android operating system, is distributed via websites and text messages that offer fake links to real cryptocurrency apps TheCryptoApp and Mining X.
Once these links are downloaded, Malibot, created in Russia, can quickly give criminals access to a victim’s phone, allowing them to collect personal and financial data and send messages to other phones, spreading the malware further.
Briedis adds: “With online banking and investing becoming part of everyday life, it’s important to take steps to prevent fraud.
“This includes using smart technologies like VPNs and virus-checking software, and increasing your digital security by creating strong passwords and verifying the source of any link, site or app before you click.”
How to protect yourself?
1) Beware of dodgy downloads
Don’t click on suspicious download links, even if they look like a genuine app. Always use official digital marketplaces like Google Play or Apple App Store
2) Take your time
No matter how much profit is promised, no real investment scheme will make you give money immediately
3) Do your homework
Discuss any significant investment with friends or an advisor and do an online search for any potential scheme.
4) Be suspicious of any celebrity endorsement
Many scam schemes feature famous people in online and social media advertising, but be careful with celebrity endorsements.
For example, Action Fraud has reported more than 1,000 bogus schemes claiming to be backed by financial expert Martin Lewis.
5) Use a VPN service
In addition to encrypting your traffic so hackers can’t see what you’re doing online, a VPN service can in some cases also inspect the files you download