Whenever you talk to someone seriously invested in cryptocurrencies, the first piece of advice you get is to stay safe. Sadly, for every serious crypto trader, there seem to be five crypto bros that offer questionable advice. As such, scammers can keep thriving in the space and preying on those without proper knowledge.
However, another, more significant issue is the lack of nearly any regulation. Of course, national bodies might get involved with bigger scams, but even that’s not a must. The latest series of crypto scams has us wondering whether the space needs regulation to survive.
Our first case is somewhat old-school, with an exchange losing millions as a result of a hack. Cream Finance, a Defi lending protocol, has been the victim of a cyberattack. To go slightly more in-depth, the AMP token introduced an opening for a bug and led to a system exploit.
Essentially, the hacker was able to lend Ethereum and deposit the lent amount as collateral to lend even more. The cyber assailant repeated the process a total of 17 times, taking out 5,980 ETH. The fiat value of the withdrawn Ethereum is about $9.5 million.
Next, we have HeroCat, a GameFi project that managed to scam its own investors. In a classic rug pull, the game’s token called HeroCat Token (HCT) shrunk to a grain of its value. Losing 99.9%, the token is essentially worthless in its current state.
HeroCat made a huge sale, exchanging its own token for Binance USD (BUSD). In total, the company transferred over $151,000 worth of crypto.
Lastly, we have a case of incompetence rather than fraud. Solana-based DeFi project OptiFi accidentally shut down during an upgrade to the system. Luckily, there will be no harm to users as the project will return all deposits.
Still, it’s difficult not to ask ourselves how long scammers will be able to run free and how long people will keep falling for their schemes.