Ethereum has been identified as the blockchain most affected by cryptocurrency scams over the past year. The analysis, which leveraged data from the REKT database, highlighted the vulnerability of various blockchains to scams, with Ethereum experiencing significant losses. Despite efforts to recover stolen funds, Ethereum’s total adjusted losses have soared, amounting to £576.6 million, even after accounting for the £152.2 million returned to victims. This figure represents a staggering increase of over 605% compared to the average losses across other blockchains, firmly placing Ethereum at the top of an undesirable list.
The scope of crypto scams
The report further details the types of scams that have been particularly detrimental. Access control exploits, where scammers leverage vulnerabilities to gain unauthorized access to user data or credentials, have been cited as the most costly for Ethereum’s ecosystem. However, Ethereum is not alone in facing these challenges. The Bitcoin blockchain follows closely, with losses exceeding £209 million, and Polygon, with over £98 million stolen due to similar scams. The study also outlines the prevalence of different types of scams across various blockchains, including rug pull exit scams on Binance and access control exploits on Centralized and Cardano platforms.
The analysis doesn’t stop with a mere listing of affected blockchains but delves deeper into the specifics of the scams, including the top five crypto scams by funds lost in 2023. The “access control” scam tops the chart with over £665 million lost, affecting Ethereum the most. Other notable mentions include “rug pull” scams on Binance, “oracle issue” exploits on Polygon, and “flash loan attacks” and “phishing” scams on Arbitrum and Ethereum, respectively. These figures underscore crypto scams’ growing sophistication and impact on major blockchain platforms.
Protecting against crypto scams
In response to the rising trend of crypto scams, industry experts call for increased vigilance and education among cryptocurrency users. Zigmas Pekarskas, CEO of Smart Betting Guide, emphasizes the importance of being cautious with personal information and skeptical of offers that appear too good to be true. Eric Jardine, Cybercrime Research Lead at Chainalysis, also highlights the need for more targeted user education to combat specific scam tactics, such as approval phishing. The crypto community can better protect itself from potential threats by building awareness and understanding of common scam techniques.
This report serves as a crucial reminder of the risks associated with the rapidly evolving cryptocurrency market. Ethereum’s position at the forefront of these challenges underscores the need for ongoing security enhancements and user education to safeguard against the financial and reputational damage caused by crypto scams. As the blockchain and crypto industries mature, addressing these vulnerabilities will be essential for fostering trust, security, and growth within the ecosystem.