Being hacked and deceiving yourself: Navigating the Cryptocurrency ‘Wild West’

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NEW YORK (Reuters) – When Peggy and Marco Lachmann-Anke learned in January that hackers cracked 40-character passwords and cleaned up their cryptocurrency wallets, they did not go to the police or warn the token issuer, this is Berlin. Technology Group IOTA.

 

They bought more coins:

German-Cypriot-based German couples describe themselves as financial educators who believe they have no chance to take back coins or even know who can accept their case. However, when they invested in a new and exciting technology in an unregulated market, they spent a large loss of about $14,000.

“We really believe in cryptocurrencies. We have been studying for about a year before investing, so we are aware of the risks,” Peggy Lachmann-Anke said. “We can’t do anything.”

This event is not only unusual, but also a symbol of the market. There are almost no rules to apply in this market, and investors’ confidence in blockchain technology is closely related to the belief that it also helps criminals cover them so well. The track is so stupid to try to catch them.

Patrick Wyman, an FBI regulatory agent in the financial crime department of the anti-money laundering department, acknowledged that cryptocurrencies pose some unique challenges.

“Broad currency systems such as bitcoin or other forms of virtual currency are not subject to any entity, suspicious reporting activities and any anti-money laundering compliance,” Wyman told Reuters.

Various estimates suggest that cryptocurrency crime is rising and keeping pace with rapid market growth. Security professionals and officials say this has forced investigators to focus on high-profile cases, actually leaving small investors on their own devices.

“We don’t pretend that every law enforcement agency is investing resources for every crime. It’s impossible,” said Europol analyst YaroslavYakubuk, the organization’s law enforcement cooperation in the European Union. The center of knowledge and intelligence.

Unfair case:

Officials still encourage people to report cryptocurrency theft to the local police like any other crime, and say that if they don’t do so, they will only make the criminals timid.

Security professionals say that because many victims simply don’t see this, cryptocurrence is much more than any published estimate.

According to financial research firms Autonomous NEXT and Crypto Aware, about 15% of cryptocurrencies were stolen in the first half of 2012 to 2018 in the first half of 2012, with a cumulative value of $1.7 billion and a rise in theft. trend. According to the data, in the first half of this year alone, more than 800 million US dollars have been stolen.

(image) In the illustrations of February 13, 2018, a graphic representation of the Ripple, Bitcoin, Etherum and Litecoin virtual currencies can be found on the PC motherboard. Image taken on February 13, 2018. REUTERS / Dado Ruvic / illustration / document photo
However, LexSokolin, partner and global director of the company’s financial technology strategy, estimates that as many as 85% of crimes have not been reported, and that the published statistics represent only publicly reported robberies.

An interview with six victims by Reuters portrayed a similar situation. In this group, only two people reported their losses to the authorities, and one was dissatisfied with the cryptocurrency investment.

Vienna-based IT expert Armin Fischer said he lost about $5,300 in a phishing scam in the summer of 2017 and immediately informed the local police that he was on duty and did not know what he was talking about.

He said that in order to have his case eventually occupied by the Vienna Prosecutor’s Office, he spent several months knocking on the door, but it was still pending. Fisher said that he is now fed up.

“I have witnessed the severity of the safety leak.”

Others are more philosophical. Dave Appleton, blockchain developer at Kuala Lumpur’s gold trading application company HelloGold, said he lost about $3,000 of Ethereum when a fake website defrauded a startup’s token pre-sale. He said that he just continued to move forward, and I am glad that he has not lost more

“The key is that no one reports crime,” Appleton said. “I am not sure which country or region it will belong to.”

According to ICO tracker Coinschedule, so far this year, a record $21.3 billion has flowed into new tokens as investors continue to snap up “original coin products”, high-profile robberies, bitcoin and other currencies have fallen from their peak in late 2017 The government warned of widespread fraud and theft.

Millions of dollars:

David Jevons, chief executive of CipherTrace, a network security company in Menlo Park, Calif., estimates that even if an exchange or trading platform is hacked, perhaps only one in five stolen coins are being reclaimed because digital tokens can be easily Cross multiple boundaries.

“You have to be interested in law enforcement in five countries, have enough time, and have enough evidence to open the case,”

He said. “When they agree, get information, do all the paperwork, the money has been moved.”
Security experts say that in most cases, millions of people need to be at risk to justify this effort
Michael Terpin, an American entrepreneur and long-term cryptocurrency investor, said he had been robbed twice and knew directly that not all hackers were equal.

He said that the first criminal used a stolen SIM card voucher to access his mobile phone, emptied his wallet and deceived his friend by imitating him to send money on Skype, and he contacted a friend of the FBI.

However, once she learned that only $60,000 was stolen, she advised him to submit a report through the FBI’s Internet Crime Center website. Terpin said he did, but never received a reply.
Then, when he lost nearly $24 million in tokens from his mobile account last January, he filed a lawsuit directly with service provider AT&T, filed a $224 million lawsuit alleging that his negligence led to “digital Identity theft, AT&T denied this.

Terpin said he is still working to compare the blockchain with earlier versions of Amazon, when online retailers faced a lot of suspicion and even ridicule.

“This is similar to today’s narrative, that is, all ICOs (original coin products) are scams, and nothing can be developed because they are not fully deployed,” he said.

Unwavering commitment to new technologies and beliefs provides an advantage for sophisticated criminals, meaning that even millions of robberies are not reported.

For example, when a hacker stole $8 million worth of Ethereum tokens from Swarm City, a company based in Zug, Switzerland, in July 2017, the peer-to-peer digital platform did not report theft to the police, business leader Bernd Lapp said.

“It is impossible to track and return funds. We survive and die with this technology.”

 

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