Crypto’s recovery requires more aggressive solutions to fraud
It’s hardly an exaggeration to say that our industry is facing tough times. We’ve been in the midst of a “crypto winter” for some time now, with the prices of mainstays, including Bitcoin (BTC) and Ether (ETH), tumbling. Likewise, monthly nonfungible token (NFT) trading volumes have fallen more than 90% since their multibillion dollar peak back in January of this year. Of course, these declines have only been exacerbated by the numerous black swan events rocking the crypto world, such as the FTX and Three Arrows Capital meltdowns. Taken together, it shouldn’t be a surprise that crypto is facing a trust deficit.
While the destructive actions of reckless CEOs must be addressed and the individuals responsible for these events must be held accountable, our industry cannot stop there if we are to rebound. To address the trust deficit that crypto faces, better security for the end user against the threat of scams and hacks must be a priority.
Don’t think so? According to research firm Chainalysis, $3.2 billion worth of digital assets were stolen in 2021. It’s not looking better for our industry this year, with $718 million in overall hacking-related losses having been reported in October alone. When it comes to scams, the picture darkens as report after report shows that known crypto scams, such as rug pulls and wallet drainers, are on the rise. Between July 2021 and August 2022, an eye-popping $100 million in investor funds were lost through unsophisticated NFT scams. And this number is likely an under-count given that most NFT scams are micro-scams impacting individual users that never get reported.
Related: Developers could have prevented crypto's 2022 hacks if they took basic security measures
Phishing links trick end users
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