The 7 Biggest Crypto Scandals of 2020

By Clark

The Bitcoin rocket jump of December 2020 and January 2021 made it the hottest months for anyone in the crypto ever since 2017/2018 turnover. During this 2-month period, hardly had one a chance to truly think of what a rollercoaster 2020 has been. Since the bitcoin bull run is being slightly settled, while the nearest future doesn’t seem to be less saturated with the upcoming news, there simply would not be a better time to recap 2020 than now.

Among all, 2020 was full of events and scandals, which literally stunned the crypto community. Let’s recall the most disruptive news and biggest crypto scandals of 2020 right here below.

Poloniex Data Leak

After a data leak of Poloniex users on Twitter, the company asked its customers to change passwords to their accounts. The crypto giant announced that most of the emails shared on Twitter were not connected to Poloniex accounts. Yet, the exchange still recommended all its users to set up two-factor authentication and change passwords as basic safety measures against the threat of crypto scams.

It is not clear what was the source of the data leak and whether the fraudsters received any real access to Poloniex accounts. Anyway, the security of Poloniex has become a subject of burning discussions after the occasion.

Hacker’s Attack On Altsbit

After the hackers’ attack on the Italian cryptocurrency exchange, thousands of users lost their coins. The only customers’ cryptos that were stored on cold wallets remain untouched. According to the company’s info, almost all funds from BTC, ETH, ARRR, and VRSC were stolen.

Currently, Altsbit allows receiving a partial refund to all its users. However, the platform will be terminated in the near future.

Lendf.me Hacker’s Attack

A crypto theft of the century happened with the Lendf.me platform in April 2020. The hackers stole over $25 million worth of crypto coins. Two attacks were performed on the weekend by the same group of fraudsters.

According to the blockchain professionals, the hackers used a complicated “reentrancy attack” to withdraw funds several times. They used a span before the original transaction was approved or declined to grab the coins.

The most amazing thing about this theft was that hackers returned the entire sum of the stolen funds to their owners. Why did they do that? One of their IP addresses leaked during the attack. However, the dForce Foundation and Lendf.me professionals were forced to negotiate with hackers with the help of blockchain transactions. Although the story has a happy ending, it showed off some weaknesses in the cryptosystems that should be fixed.

Cancellation Of Ton Blockchain Project

Pavel Durov, one of the Telegram founders, announced the termination of his company’s participation in the crypto-focused TON project in 2020. The main reason for shutting down was the decision of the SEC.

The fact is that the U.S. Securities and Exchange Commission banned the emission of Gram, the crypto coin based Telegram Open Network platform. Moreover, Gram was recognized as a security. According to the SEC decision, Durov’s company will also need to return over $1,2 billion to investors.

Gram was a promising crypto analog to Visa and Mastercard. Moreover, it had an incredibly high transaction speed that significantly exceeded the time required for making operations by most popular cryptocurrencies. In other words, Gram was likely to become not only another cryptocurrency for investments but also a new payment instrument used for making superfast transactions. However, it is now closed.

Hack Of Supercomputers Throughout The World

A number of supercomputers located in different parts of the world, including Germany, Switzerland, Spain and the US, were infected by malware in May 2020. The machines, which were mainly involved in the research on the COVID-19 outbreak, had to be shut down due to these security incidents that required advanced investigation.

Rumors say the threat originates from China with the primary motive to exploit the super capacities for mining the cryptocurrency, but no proof. None of the organizations that hold the infected supercomputers published any reports about the incidents.

Twitter Bitcoin Scam

There is nothing new that Twitter is one of the most widely used social media that allows keeping in touch with the latest news shared by political and business leaders, as well as influencers in various industries. However, it was fully compromised in July 2020. So, what happened?

On July 15, 2020, over 130 high-profile accounts that had millions of subscribers were hacked. Each account shared scam information about one of the most popular cryptocurrencies, offering the subscribers to send Bitcoins to a certain wallet. All users, who would make this transaction, were promised to double their investment. This measure was represented as a form of charity, so many users believed in the scheme. This fake message became incredibly popular in minutes and brought over US$110,000 to the owners of a fake wallet. Although the message was blocked by Twitter at a lightning speed, thousands of users became the victims of the Twitter Bitcoin scam.

The reason for such an issue was that real account owners lost access to Twitter’s administrative tools. This means the hackers could post the tweets directly from accounts of world leaders, including Barack Obama, Bill Gates, Warren Buffett, Elon Musk, Joe Biden, and other public people with a whopping number of followers. This attack is now considered the worst hack of a popular social media platform ever.

XRP December Crash 

Ripple, one of the most popular cryptocurrencies, faced a significant drop in December after the US SEC announced that the company’s sales policy of Ripple broke securities regulations. According to SEC’s information, the company’s executives raised funds to finance Ripple’s business by selling XRP in unregistered securities to investors all over the world. This announcement only caused the coin’s down nearly 18% and made it subject for further fluctuation later on. The future of XRP price is quite questionable, though this piece sheds light on what is predicted for 2021-2025.

Clark

Head of the technology.

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