Scammers Use ‘Age-Old Hacking’ to Rob Crypto Users

Scammers have begun using fake cryptocurrency websites to steal funds from users, part of a wave of hacks involving the crypto industry.

“A lot of people are making fake versions of real websites and directing users to those pages so they can take their money,” Erin Plante, senior director of investigations at the blockchain data platform Chainalysis Inc., told Bloomberg News Thursday (Sept. 8). “A lot of this is age-old hacking.”

The report notes that the sham websites disguise themselves as pages for popular crypto services like Coinbase to trick visitors into giving up information that will let hackers into their cryptocurrency wallets.

Scammers used search-engine optimization methods to promote the websites, which used URL addresses that resembled legitimate sites and vaulted the fake pages to the first page of Google’s search results.

That meant people who searched for things like “kraken wallet” or “coinbase not working” would get results with the phishing links on the first page, Bloomberg said, noting that a fraudulent version of the Kraken wallet ranked higher in a Google search than Kraken’s Twitter account and its app on the Google Play Store.

Learn more: PYMNTS Intelligence: Keeping Consumers Safe in Web 3.0

According to recent research by PYMNTS, more than 46,000 people have reported losing upwards of $1 billion in crypto to fraud since early 2021, with a median individual loss of $2,600. The most common currency used to pay these scammers was bitcoin, cited in 70% of cases, followed by tether at 10% and ether at 9%.

Close to half the people who reported losing crypto to a scam since 2021 said their first interaction with the scammer was via an ad, post, or message on social media.

The majority of crypto fraud with origins on social media is investment fraud, with romance scams a distant second. However, the median reported loss for people who fall victim to romance scams is far higher: $10,000.

Experts fear that without the adoption of strict security measures, identity fraud and theft, which are already some of the top metaverse risks, could continue to spread and grow.

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