A bug in the multi-signature code led to the theft of 153,037 ETH, valued at around $32 million in July 2017. The Parity Wallet has had two major security incidents, resulting in the loss of 666,773 ETH, or approximately $182 million at the time. Cryptocurrency is not backed by any government or physical asset, which can make it vulnerable to market volatility and other risks. My uncle is sharp, educated, and detail-oriented—and still got caught. To avoid becoming part of these statistics, people must keep a number of things in mind. Meanwhile in France, kidnappings of wealthy cryptocurrency holders and their relatives in ransom plots have spooked the industry.
- Cryptocurrency crime cases are on the rise globally, with reports of scams, hacking, and other illicit activities increasing steadily.
- Some are accused of hacking websites and servers to steal cryptocurrency databases and identify targets, but others are alleged to have broken into victims’ homes to steal their “hardware wallets” — devices that provide access to their crypto accounts.
- The U.S. government has imposed sanctions on entities and individuals to curb illicit activities, but the effectiveness of these sanctions has been mixed.
- Ultimately, all that $4.5B worth of illicit cryptocurrency needs to be laundered.
Cryptocurrency-related losses totaled more than $5.6bn in 2023 with over 69,000 complaints relating to financial fraud and crypto received by the Federal Bureau of Investigation (FBI) Internet Crime Complaint Center (IC3) in 2023. There are also liquidity mining scams where victims are promised high returns for staking their assets in a liquidity pool. In what concerns investment fraud, the main trends revolved around variations of dating apps and professional networking platforms leading to “pig butchering” sites. We are also seeing a continued trend vis-à-vis the types of assets involved in crypto crime.
Cryptocurrency Scams
As we highlighted in our 2024 mid-year crypto crime update, Huione and all vendors operating on their platform have processed more than $70 billion in crypto transactions since 2021. Through 2021, BTC was unequivocally the cryptocurrency of choice among cybercriminals, likely due to its high liquidity. Since then, however, we have observed a steady diversification away from BTC, with stablecoins now occupying the majority of all illicit transaction volume (63% of all illicit transactions). This new reality is part of a broader ecosystem trend in which stablecoins also occupy a sizable percentage of all crypto activity, demonstrated by total growth YoY in stablecoin activity around 77%. In our 2024 Geography of Cryptocurrency report, we covered the wide array of practical use cases for stablecoins in a range of markets, such as storing value, sending remittances, facilitating cross-border payments, and international trade. Additionally, stablecoin issuers often freeze funds if they are made aware of their use by illicit actors.
Crypto Scams, Pig Butchering And Cybercrimes From The New FBI Report
The agency and experts say the crypto crime underworld is likely being fueled by the large amounts of money at stake – combined with weak regulation of cryptocurrency that allows many transactions to be made without identity documents. The Chainalysis report found that 2025 could potentially have “twice as many physical attacks as the next highest year on record,” based on the projected rise in the price of bitcoin. The report also noted that the number of previous attacks may be even higher than recorded, as many go unreported. Marilyne Ordekian, a doctoral candidate at University College London who co-authored a study on wrench attacks, said her research found a direct correlation between the number of attacks and the rise and fall of the price of bitcoin. A report from the blockchain analytics firm Chainalysis had similar findings.
Investors Have Lost Nearly $2.5B on Crypto Scams, Hacks So Far in 2025: Report
Exchanges are a crucial part of the cryptocurrency ecosystem, but they’ve also become a breeding ground for scams and hacks. Cryptocurrencies like Bitcoin and Ethereum use advanced cryptography to secure transactions and control the creation of new units. Cryptocurrency is a digital or virtual form of currency that uses cryptography for security and is decentralized, meaning it’s not controlled by any government or financial institution. Software wallets connected to the internet remain vulnerable while hardware wallets are a crucial security barrier against remote attacks. Seniors, crypto investors, and even real estate buyers are now on the frontlines of digital deception. And in January, the co-founder of French crypto-wallet firm Ledger, David Balland, and his wife were also kidnapped for ransom from their home in the region of Cher of central France.
Types of Cryptocurrency Crime
No, we didn’t recover the money—but the process gave him back a sense of agency. His story became a cryptocurrency crime losses more data point in a much bigger web—helping the FBI track, disrupt, and dismantle the very networks that scammed him. I’d always assumed scams happened to people who clicked suspicious links or ignored basic security advice. While crypto thefts are not new, the use of physical violence is a far more recent trend, said John Griffin, a finance professor at the University of Texas in Austin who tracks financial crimes. Ordekian said that in most cases, perpetrators are successful in taking money from their victims.
Five Lessons from the IC3 Report About Cybercrime and Crypto Scams
In Pakistan, the current legal state of cryptocurrency is fluid, making Arsalan’s case difficult to navigate. Pakistan’s government has been critical of cryptocurrency but has also taken some steps that recognize its increasing legitimacy. Arsalan’s perpetrators had messaged him on Instagram about purchasing tether from him prior to his abduction. Ivaibi said that one of the people involved in his kidnapping was a family friend. Woeltz and Duplessie are alleged to have known their victim personally for several years, according to prosecutors.
- Certik reported that the majority of funds were stolen by compromising crypto wallets, at $1.71 billion, while another $410.75 million was stolen through phishing attacks.
- While crypto thefts are not new, the use of physical violence is a far more recent trend, said John Griffin, a finance professor at the University of Texas in Austin who tracks financial crimes.
- Understanding the difference between a wallet address and a transaction ID/Hash is essential for ensuring your cryptocurrency is secure.
And while many victims work to change their daily lives following their attacks, many still carry fear from their experiences. Lopes said he has also taken measures in the real world, like making sure that his family is accompanied by security personnel, in order to avoid another attack. “We have been able to track the funds, and those funds were formed in a certain Binance account, and we were able to contact Binance through the Uganda police intelligence, and they sent us the KYC,” Ivaibi said. Arsalan eventually filed a complaint with Karachi police, despite having been threatened with murder by his captors if he were to go to the authorities. The alleged perpetrators were arrested within three days after Arsalan filed a complaint.
What makes this even more troubling is how tailored these scams are. Fraudsters often use emotional manipulation, impersonate trusted institutions like Medicare or the IRS, or simulate emergencies involving grandchildren to trigger panic and urgency. Many scams are designed to isolate victims, urging secrecy or fabricating legal consequences to keep them from asking for help. With technology becoming more complex and scams more believable, seniors face a uniquely dangerous combination of high financial risk and low digital defense. All, authorities allege, were victims tied to cryptocurrency-related crimes that have spilled out from behind computer screens and into the real world as the largely unregulated currency surges in value. The research also showed that bitcoin is the payment of choice for cyber extortionists.
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