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Hackernoon logoTop 5 Ways You Lost Your Crypto in 2020 by@zumopay

Top 5 Ways You Lost Your Crypto in 2020

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@zumopayZumo

The wallet and payments platform that makes your money and cryptocurrency work seamlessly and safely together.

Not all crypto products are born equal.

Chainalysis’ 2020 Global Adoption Index recently illustrated just how much the adoption of cryptocurrencies is continuing to grow worldwide year on year. 

Before Zumo arrived in the app store, choosing a place to buy, sell or store your cryptocurrency was a bit like playing that old favourite Minesweeper; the landscape was littered with an array of well-orchestrated scams and schemes ready to rid you of your hard-earned cash. 

Cryptocurrency scams netted over $4 billion in 2019. Amongst the targets were popular trading exchanges, world-leading social media platforms, and thousands of private email accounts. 

Blockchain analytics provider Whale Alert released figures earlier this year indicating that $24 million of cryptocurrency was stolen in the first 6 months of 2020 alone.

From fake Bitcoin giveaways hosted by Elon Musk (not the real one) to multi-tier Ponzi schemes, scamming  big business in crypto.

Here are 5 ways that you could have lost your crypto in 2020:

1. Falling for the biggest Twitter scam of the year

Spend 10 minutes scrolling results of a #cryptocurrency tag search on Twitter.

You will find an online community full of tech investors, thought-leaders, top tier computer programmers, revolutionaries, and professional meme artists (yes that is a real job now) that live and breathe everything crypto. 

But what also becomes all too clear whilst clambering through the depths of what is often referred to as “Crypto Twitter” (or CT for short) is that there are plenty of ways to get fleeced of your cash.

A popular type of scam on Twitter and one that made world news headlines earlier this year is the “fake giveaway”.

On July 15th, verified Twitter accounts of high profile figures and companies were hacked. The hackers used their profiles to promote a fake cryptocurrency giveaway that promised users $2,000 in Bitcoin in return for $1000.

Accounts hacked included Apple, President Barack Obama, former Vice President Joe Biden, Elon Musk, Kanye West, Bill Gates, and Uber.

Hackers collected over $100k of stolen funds from the attack, and accessed Twitter’s “God Mode” through a phishing attack that tricked a Twitter employee into handing over login credentials (we cover the joys of phishing in #5). 

If you want a safe giveaway, stick with Zumo’s refer and share programme: guaranteed 0.02 Eth for you and for every person you refer, every time.

2. Leaving funds on a centralised exchange (that gets hacked)

Centralised exchanges act as a middleman for anyone looking to buy and sell cryptocurrencies. 

Offering a variety of currencies to trade in a somewhat regulated environment, centralised exchanges are a popular choice for many newcomers to crypto.

But there’s an issue.

Once deposited on a centralised exchange, the fate of your funds lie entirely in the hands of the exchange owners.

Sounds risky? It can be.

On September 25th 2020, hackers stole more than $275 million worth of cryptocurrency from KuCoin, a popular cryptocurrency exchange platform. 

This incident was one of the largest ever exchange hacks and, as the hackers used various methods including mixers, diversifying into a handful of currencies on decentralised exchanges in an attempt to wash their ill-gotten gains, it has been difficult to trace.

It is imperative that you take custody of your own funds when not actively trading them. Holding them in a secure personal wallet that only you have access to is the only way that you can ensure safety from large scale hacks.

So write it down, make it your morning mantra, heck get it tattooed in your forehead if you must, but always remember:

"Not your keys, not your crypto". Zumo hands you the keys and is by far the safest way to interact with your crypto on the blockchain.

3. Getting SIM swapped

SIM swapping is on the rise in 2020.

SIM swappers trick your mobile service provider into porting your phone number over to a new SIM card embedded in a device that they control.

Scammers can gain access to everything on your phone including email accounts, bank accounts and trading exchange accounts.

Research published earlier this year by professors and Ph.D. students at Harvard University highlighted the increased vulnerability to SIM swap attacks in 2020, especially as more people are working remotely than ever before.

What is scarier is that whilst conducting the study, one of the authors of the research paper himself was SIM swapped. 

Go figure.

To give you an idea of just how much damage can be done through SIM swapping, hold your breath and read this unfortunate tale of how one man lost $24 million of cryptocurrency in a coordinated attack.  

But don’t worry, if you’re a Zumo app user, even if your SIM were to be swapped, they still wouldn’t be able to access your crypto without your keys. Always keep your key codes separate to your phone!

4. Being tricked by phishing websites

2020 may go down in the history books as the “year of the phish”.

Socially engineered cyber attacks might well be this year’s flavour when it comes to scams, and have been prevalent in the cryptocurrency space. 

These intricately designed attacks often direct people via email to fake websites, ultimately tricking them into unknowingly handing over their private details. 

Just earlier this month over $280k of the cryptocurrency Ripple (XRP) was stolen by scammers that managed to trick users into visiting replicated versions of the popular hardware wallet website Ledger.

This year also saw US authorities jail two Russian men accused of stealing nearly $17 million worth of cryptocurrencies, in a spate of phishing attacks during 2017 and 2018 that tricked people into visiting replica websites of popular cryptocurrency exchanges.

Our advice? Stay well aware from anything phishy by only using the Zumo app to exchange cryptocurrencies.

5. Investing in Ponzi schemes

Ponzi schemes have been around for a long time and they don’t seem to be going anywhere anytime soon, especially when it comes to cryptocurrency.

Ponzis work by convincing you to invest in something with the promise of sizable returns on your investment and little or no risk.

Your returns are made with new money when fresh investors are lured into the scheme, creating a pyramid of promised returns and deceit.

Most of the time there is, in reality, little or even no business development going on in the background and ultimately these schemes collapse when the founders disappear with all of your funds.

Promising a 30% return to investors, the most recent high profile Ponzi scheme has collected over $4 million to date.

Conclusion

When it comes to cryptocurrency, it’s still a jungle out there. 

With the total amount of money stolen in crypto scams to date well into the billions of dollars, the utmost care needs to be taken when dipping your toes into the world of cryptocurrency.

It isn’t all doom and gloom though; pioneering tech companies around the world are working hard to address these issues head on, and with great effect.

Leading the charge is Zumo, a company that offers people a way to get involved in cryptocurrencies without the risks, with a secure and easy to use non-custodial cryptocurrency wallet.

With brute force attack protection and all encryption performed locally, the Zumo app offers users an airtight and easy to use solution for buying, selling, storing, sending and spending both cryptocurrencies and traditional money.

Discover how Zumo are leading the way into the future of smart, safe and secure money at https://zumo.money.


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