A report by Chainalysis revealed that crypto scammers stole over $14 billion in 2021 alone. The majority of the funds were stolen by rug pulls, which are attacks by developers who pretend to be building legitimate cryptocurrency projects but are actually stealing investor money. In total, about $13 billion has been lost to these scams, which do not include losses associated with DeFi tokens.
In 2021, thieves stole a record $14 billion in cryptocurrency, a 79% increase over the previous year. The spike in cryptocurrency-based crimes was attributed to an increase in theft, which was the most common form of crypto crime. Most of these scams and thefts involved hackers targeting businesses that were using cryptocurrencies. However, it’s still possible to protect yourself from falling victim to these frauds.
A multibillion-dollar Ponzi scheme, called PlusToken, has led to a massive increase in crypto crime. DeFi has become so popular, however, that scammers can create and get new tokens listed on exchanges with ease. This has allowed for a spike in theft.
Despite the growing popularity of cryptocurrency and the growth of decentralized finance, the numbers show that a massive increase in fraudulent activities is taking place in the sector. According to a report by Chainalysis, the illicit activity in the decentralized crypto space increased by 516 percent over the previous year. The number of scams and stolen funds in 2021 is only the tip of the iceberg.
Despite the large rise in crime, the total amount of illicit activity in the crypto industry is still minuscule compared to the $15.8 trillion in legitimate trading volume across 2021.
While crypto is becoming more popular, investors in Italy and elsewhere need to be aware of the risks it comes with. Because of its high-tech nature, the cryptocurrency industry will attract many sophisticated scammers that will pull off Olympic-level hacks and schemes. An example of a recent scam is the “Squid Game” case, which involved a cryptocurrency-based immersive game. After the currency skyrocketed in price, its developers disappeared, leaving investors with their money.
In 2020, Italian postal police arrested an individual they suspect of being behind one of the biggest cryptocurrency scams in the country. The individual has the initials “F.F.” and is 34 years old. He is a member of the crypto investment firm Bitgrail. The man allegedly used encrypted communication services like Telegram to trick his victims into investing in the bitcoin exchange.
The police seized two kilograms of gold worth around EUR70,000 and 58 bitcoins worth EUR200,000. In Italy, BitGrail, a Bitcoin exchange, has been shut down after a hack. During the hack, it lost $180 million worth of Nano tokens, and drove the company into bankruptcy. The Italian government suspended two more investment projects since. But the police are still urging investors to be careful.
The Italian postal police said that more than 230,000 people have been defrauded through the online investment scam, which operated through a market-listed German investment company in Cyprus. Authorities have suspected that there are many more victims in other European countries. In Italy, Eurojust assisted the authorities by freezing the assets of the company and bank accounts. If you’re thinking of investing in cryptocurrency, it’s better to seek legal advice from an attorney before you invest.
Are you a victim of such scams in Italy? Scam Help is here to hold your hand and explore ways of recovering your lost funds. Please contact Scam Help.
