From the first days of the emergence of cryptocurrencies, since developers learned how to create new cryptocurrencies or quickly build infrastructure models, such as digital asset trading platforms, scammers began to emerge.
According to the analytical blockchain-company Chainalysis, over the past two years fraud in the Ethereum ecosystem has become quite common, and this cryptocurrency was the choice for fraudsters for a number of reasons, says the latest report from Ethereum.
Chainalysis company releases a series of studies on the latest trends in cryptocurrency crimes. The company's study, Crypto Crime Series: Decoding Ethereum Scams, explains why Ethereum (ETH) has become the primary choice for cryptocurrency ecosystem scammers. In 2017, the ETH was stolen for only $ 17 million, in 2018 approximately 0.01% of the ETH were involved in fraudulent schemes, amounting to $ 36 million.
The number of fraudsters decreased in 2018, although the rest were more inventive, carried out complex operations and received significantly more profits.
- Reports Chainalysis.
From the end of 2016 to the end of 2018, Chainalysis found more than 2000 fraudulent addresses on the Ethereum network, which received funds from about 40,000 unique users. Fraud activity in 2018 increased by 75%.
There are four types of fraud that occur in the space of Ethereum - open fraud, ICO scam, Ponzi products and phishing attempts. Chainalysis also notes that the frequency and success of frauds may change over time.
Scammers resort to innovative tools and perform more complex fraudulent operations under the Ponzi and ICO scheme, which as a result bring them millions of dollars in revenue.
Chainalysis is not the only group that oversees the Ethereum network in cases involving fraud. At the Etherscamdb.info site, you can see a lot of frauds related to ETH.
The Etherscam database registered 6,378 frauds, of which 924 are currently active. The records show 1975 addresses related to fraud, and out of 6378 approximately 5454 are inactive.
It should also be borne in mind that this information is a single database of Etherscam and there are many fraudulent activities that go unnoticed.
Etherscam collects data on fake My Ether Wallet (MEW) websites, Punycode public domains, fake exchanges, fake gifts, and non-existent ICOs. Then there are the Ponzi games tied to the Ethereum ecosystem with multi-level pyramid applications such as Fomo 3D and Powh 3D. These platforms only earn money by bringing new users and using all sorts of tactics like betting methods and multi-level marketing methods. Back in March, the founder of dApp Radar, Skirmantas Januskas (Skirmantas Januskas), analyzed the version of the game PoWH3D and called it the largest pyramid on Ethereum in its history.
Despite the fact that there are many scams on the Ethereum network, ETH users can protect themselves by not participating in outright fraud. Cryptocurrency veterans always advise storing securely private keys, using cold wallets for storage, and using multi-signatures, these are necessary actions to preserve financial information.
There are also many other methods that you can use to protect yourself from fraud, which will help keep digital assets safe. For example, these are bookmarks on official cryptocurrency sites, checking copies and inserted addresses, as well as reminding yourself that free cheese is only in a mousetrap.
As Chainalysis reports, petty frauds are already appearing much less, however, those that exist are becoming more complex and sophisticated.
