Crypto thefts, hacks and scams

Today, cryptocurrencies are an incredibly valuable commodity for criminals. Cryptocurrency is liquid, easily transportable, and once a transaction is made, it is nearly impossible to reverse. As a result, a wave of scams, both decades-old classics (e.g., exit scams or pump and dump) and cryptocurrency-specific scams (e.g., 51 percent attack) have flooded the digital space.

Crypto thefts, hacks, and scams cause significant damage. Within a year, sums in the billions are registered through crypto crimes. Exchanges, platforms, and providers put a lot of energy and money into the security of their systems and take preventative measures against threats from inside and outside. For example, when a major $281 million hack of cryptocurrency exchange KuCoin took place in 2020, the exchange claimed that it subsequently recovered 84% of the stolen funds – something that was almost unthinkable in previous years.

The following lesson 7 shows different scams of criminals and explains their approach. However, the focus is on imparting knowledge in order to understand the mechanisms and not a guidebook.

Please also see the Mini Glossary and the references at the end of this lesson for further information.