COVID-19 Cryptocurrency Scams

The emergence of the coronavirus triggered a variety of scams. From antivirus programs that claim to protect you from COVID-19 to free Netflix passes, you will find no shortage of hoaxes. A majority of these scams are familiar ones, only making an appearance when a huge incident occurs. With a pandemic like COVID-19, these scams wasted no time in rearing their ugly heads once again.

However, for all the scams that we cover and warn against, one that rarely gets attention are crypto scams. They exist, but in times of chaos, we tend to focus more on fraudulent charities or suspicious texts asking for personal information. The coronavirus’ escalation and increasing seriousness would eventually shed light on crypto scams. How? Well, by leading to the creation of fake cryptocurrencies.

Targeting those in need

A report reveals astonishing growth in the number of phishing and website scams. No doubt those behind them were looking to exploit the acceleration of the COVID-19 pandemic. Among these scams includes websites that are peddling fake COVID-19 cryptocurrencies and crypto-wallets. The intent behind these deceptions is to acquire data for the purposes of phishing. One particular site claims that its crypto coin’s value increases with each death at the hands of the virus.

The findings in Bolster’s Q1 2020 State of Phishing and Online Fraud Report are certainly telling. More than anything, they are similar to other industry reports that analyze hackers’ recent COVID-19 gold-rush. Such reports include Bitdefender’s own research on the subject, which we will dive further into later. In Q1 2020, Bolster would record a noticeably rapid increase in phishing and website scams. Unsurprisingly, roughly a third of all confirmed phishing and counterfeit pages correlate to COVID-19.

One of the primary targets of these scams is those in need of medical treatment. In March, researchers were able to find a total of 102,676 websites connecting to medical scams. 1,092 of those sites were doing one of two things. They were either offering Hydroxychloroquine (brand name ‘Plaquenil’, among others) or spreading misinformation about using it as a cure for COVID-19. Following an in-depth investigation, the conclusion was that these fake cryptocurrencies and wallets are meant for future scamming. They are targeted malware that will use saved data as a way for them to steal the users’ credentials.

Phishing increase

There are people so desperate for a remedy that they will believe anything so long as it is convincing enough. Scammers are aware of this and have no qualms about benefiting from this desperation.

COVID-19 medical scams play on more than just a cure, as we’ve seen before. They also play on stimulus checks, as well as loans. Moreover, hackers are targeting remote workers and those who are in quarantine. Now more than ever, remote workers are using an array of communication and collaboration platforms. This excessive use would lead to a 50% increase in phishing sites preying on the practice, lasting from January to March. Streaming phishing sites are sprouting even more within the same period. According to Bolster researchers, they are expanding by 85%.

Probably the most interesting discovery in the report was the following:

Bolster discovered multiple phishing websites peddling fake COVID-19 cryptocurrencies and crypto wallets that aim to siphon data for future phishing, targeted malware, or credential-stealing. One COVID-19 cryptocurrency bills itself as ‘The World’s Fastest Spreading Crypto Currency’ and attempts to get visitors to download suspicious files off GitHub. Another site prompts visitors to register to find out more information about a COVID coin that ‘gains value as more people die and get infected.’”

Effects on healthcare

It’s no secret that healthcare systems are under incredible stress during this global pandemic. Hospitals and healthcare facilities all over the world are also taking a hit from waves of cyberattacks. Among these attacks include ransomware.

Bitefinder states in their report that, while officials have already issued warnings that hospitals:

“…governments and universities may be more conscious about losing data and access to critical systems.”

Bitdefender telemetry discloses a common target with these cyberattacks and ransomware incidents. A majority of these occurrences are directly targeting healthcare and it was significantly increasing over the course of a couple of months.

According to Bitdefender telemetry, in March, the number of cyberattacks detected at hospitals went on the rise. Specifically, its increase was almost 60% from February. This is the highest spike in cyberattacks transpiring at hospitals, especially of those reported over the previous 12 months. It effectively displays the fact that cybercriminals are leveraging the pandemic in order to launch these malicious campaigns.

Spreading chaos and worry

Cybercriminals did not beat around the bush when taking advantage of this pandemic news.  Utilizing it allows them to expand upon their fraudulent schemes and target those who are most vulnerable. As mentioned earlier, there is a wide variety of scam types. There are fake cryptocurrency launches, but there are also phishing, charity scams, medical scams, and robocalls. The point is there are plenty of avenues that scammers can go down. With this in mind, it is imperative that you act rationally and keep the presence of mind in order. You must never invest your time, money, and efforts on suspicious-looking activities.

There are some cyber criminals who are uploading inaccurate information on fake websites that bear a striking resemblance to official ones. These strongly similar appearances fool people into believing that these sites are authentic. Or it makes them think that they are simply a branch of the actual sites.

On these fake sites, they mention that the reports and the information are coming from medical experts. However as you might expect, they are bogus. It is all an attempt to fan the flame and spread chaos.

A few of the websites are also setting up schemes for investing in certain stock market opportunities. They do this by claiming that the value will rise over time, even during this period of crisis. These schemes, of course, are false, and you need to focus on judging what is possible and what is not. Likewise, COVID-19 cryptocurrencies are fraudulent and do not exist. The idea of the asset’s value increasing with every death from the virus is truly heartless on the scammers’ part.

A big year for crypto scams

In a report from cybersecurity firm, Cipher Trace, they state that nearly $1.4 billion in cryptocurrency have been stolen by scammers. Now, on the surface, it looks like the crypto space is recovering. The number is massive, but the figure is comparatively less than the cryptocurrency that was stolen last year. However, both 2019 and 2020 are showing a noticeable increase in thefts over 2018. During that year, there was $1.7 billion stolen.

It’s true that scammers have taken less this year than they were able to in 2019. Be that as it may, there are some bizarre similarities between this year’s crypto scams and last year’s.

According to John Jeffries, who is the Chief Financial Analyst at CipherTrace:

2020 is on track to be, at minimum, the second-highest year on record for the total amount netted by criminals from cryptocurrency crime. However, it’s possible that 2020’s cryptocurrency crime numbers could exceed 2019’s $4.5 billion.”

So, if these scams are notorious, why do they continue to be effective? Is the crypto scam landscape changing or are crypto-criminals reusing the same tactics? Nir Kshetri, Professor in the Bryan School of Business and Economics at UNCG and research fellow at Kobe University, has a theory. A large number of cryptocurrency fraudsters appeal to people’s inherent greed. Put simply, these schemes turn out so successful because they promise substantial returns.

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