Crypto phishing scams claim more than $2.3m in the second quarter

August 16, 2018
Chris Wheal

More than $2.3m in cryptocurrencies was stolen through initial coin offering (ICO) scams in the second-quarter of 2018 according to estimates from Russian cybersecurity firm Kaspersky Labs.

ICO phishing scams raised more than $2.3m for fraudsters in the first quarter

In its report entitled “Spam and phishing in Q2 2018” Kaspersky said its anti-phishing system prevented 58,000 user attempts at connecting to phishing websites.

Sensitive information

Phishing is where fraudsters attempt to retrieve sensitive information such as usernames and passwords, bank details and other personal data by posing as a legitimate business online or through email communications.

In the crypto sector, phishing operations masquerade as popular digital wallets to obtain private key information, or run scam ICOs, using the name of new projects to collect money from potential investors.

In some cases, Kaspersky Labs noted, ICO phishing scam websites – and emails leading to the scam web page – are launched before the official project sites.

Ethereum popular

The team at Kaspersky said ethereum was currently the popular cryptocurrency with phishing operations.

“The popularity of Ethereum with cybercriminals increases as more funds are attracted by ICOs on the Ethereum platform,” the company explained.

Research published in July by Satis Group, claimed that nearly 80% of ICOs in 2017 were identified as scams. While this proportion might seem dramatic, the amount raised by these scams was $1.3bn compared to the $8.3bn raised by legitimate ICO projects.

SEC scam website

In May, the US Securities and Exchange Commission iterated its concerns over the growing use of fake websites to scam potential ICO investors by launching a fake web page of its own.

SEC’s “Howeycoins” fake ICO web page

Designed to show how “too good to be true” offers can seem appealing to investors, the Howeycoins ICO site included celebrity endorsements and claims of guaranteed returns.

“We want investors to see what fraud looks like, so we built this educational site with many of the classic warning signs of fraud,” the SEC said as it encouraged investors to do their due diligence and ask questions.

Post written by Chris Wheal
Chris Wheal is editor of OpenLedger's news and features service. An award-wining business journalists himself, he runs a team of freelance journalists from across the UK and north America.

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