Push Admin

How criminals manage to steal cryptocurrency

Article (news)

Joseph Boyle and Lucie Lequier, Agence France-Presse

<div class="embed-wrap"><figure data-feedback="fb:likes,fb:comments"><img alt="A message on a vendor" s="" booth="" is="" seen="" on="" display="" at="" the="" Consensus="" blockchain="" technology="" conference="" in="" New="" York="" May="" Mike="" Reuters="" src="https://sa.kapamilya.com/absnews/abscbnnews/media/2022/reuters/02/09/20220209y_rtrmadp_3_crypto-coalition.jpg"/><figcaption>A message on a vendor&#x27;s booth is seen on display at the Consensus 2018 blockchain technology conference in New York City, May 16, 2018. <em>Mike Segar, Reuters/file</em></figcaption></figure></div><p>US officials announced on Tuesday they had recovered $3.6 billion of bitcoin stolen in 2016, throwing a light on the scams that surround cryptocurrency.</p><p>But how exactly do criminals steal in the virtual world?</p><div><strong>- Hacking the exchanges -</strong></div><p>Bitcoin and other cryptocurrencies are bought, sold and stored on exchanges, just like commodities in the non-virtual world.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/02/09/22/us-seizes-36b-of-stolen-bitcoin-in-record-haul">US seizes $3.6 billion of stolen bitcoin in record haul</a></li></ul><p>But crypto investors, and those who organize exchanges, often object to centralized control and reject stringent oversight — and that sometimes leads to lax security.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/01/11/22/nft-sales-hit-25-billion-in-20-but-is-growth-slowing">NFT sales hit $25 billion in 2021, but growth shows signs of slowing</a></li></ul><p>&quot;Exchange sites have stocks that are relatively large at any given time in crypto,&quot; says Manuel Valente of Coinhouse, a French company that manages crypto transactions. </p><p>&quot;But these are servers, machines — and malicious people sometimes manage to get into their servers and steal money.&quot;</p><p>Most of these problems are caused by weak security, he says.</p><p>Alexander Stachtchenko of KPMG agrees, pointing out that some platforms still store passwords on their servers.</p><p>&quot;If you can get into the server you can steal the passwords,&quot; he says. &quot;Once you have the passwords, you move the bitcoins from one address to another and then people don&#x27;t have access to those bitcoins.&quot;</p><div><strong>- Hacking the blockchain -</strong></div><p>All things crypto rely on the blockchain — a chain of code composed of interlocking blocks. It stores the details of all transactions made in cryptocurrency.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/11/30/21/cryptocurrency-omicron-in-frenzy-over-covid-19-variant">Cryptocurrency Omicron in frenzy over coronavirus variant</a></li></ul><p>Because each block is linked, it is impossible to change a block of code without altering the whole chain — the basis of the security claims made by those who trumpet the benefits of crypto.</p><p>However, there is a theory that if a group was to obtain more than 50 percent of a particular blockchain, it could start rewriting transactions, blocking new ones and double-spending coins.</p><p>An exchange called Gate.io alleged it lost $200,000 in an attack like this in 2019, but experts think it would be impossible to target major players such as bitcoin.</p><p>Such an attack &quot;would be incredibly hard and incredibly energy intensive&quot;, says Erica Stanford, author of &quot;Crypto Wars: Faked Deaths, Missing Billions &amp; Industry Disruption&quot;.</p><p>&quot;With bitcoin now it wouldn&#x27;t be possible because of how much energy it would use.&quot;</p><div><strong>- Crypto-adjacent crime -</strong></div><p>Many of the scams around crypto are less to do with the technology and more linked to old-fashioned confidence tricks or extortion where the criminals asked for payment in crypto.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/11/24/21/india-announces-bill-to-ban-cryptocurrencies">India announces bill to ban cryptocurrencies amid PM warning of risks</a></li></ul><p>The main family of scams have been the Ponzi-style schemes, where a new coin is hyped and its value inflated by the creators, who then dump all their coin when the price reaches its highest point, leaving many investors penniless.</p><p>Such frauds, while not unique to crypto, netted $7 billion for scammers in 2019 but dropped massively the following year, according to analysis firm Chainalysis.</p><p>&quot;The main scam hasn&#x27;t been about crypto so much as about using the belief that people will get rich quick to trick people into investing,&quot; says Stanford.</p><p>She concedes, however, that the newness of crypto and its allure as a get-rich-quick idea has helped the scammers no end.</p><div><strong>- The net closes -</strong></div><p>While cryptocurrencies became notorious for these Ponzi-style schemes, Stanford points out that the high point of the scams was between 2016 and 2018.</p><ul class="op-related-articles">	<li><a href="https://news.abs-cbn.com/business/11/10/21/from-squid-coin-to-memes-the-wild-west-of-crypto">From Squid coin to memes, the &#x27;Wild West&#x27; of crypto</a></li></ul><p>She says the market has now matured, people are more knowledgable, law enforcement and regulators are more involved and analytical tools abound, allowing the currencies to be traced.</p><p>Chainalysis reported that overall crime related to crypto fell hugely last year. </p><p>Stachtchenko points out that many of the major platforms have now ramped up security to combat hackers.</p><p>&quot;Some have even bought &#x27;bunkers&#x27; — a kind of digital safe,&quot; he says.</p><p>Valente agrees, saying that monitoring has been ramped up to such an extent that criminals will not be able to spend their crypto even if they hide it for years.</p><p>&quot;As soon as the stolen bitcoins start moving again, everyone knows,&quot; he says. &quot;Now, almost no company will deal with bitcoins that have been stolen.&quot;</p><div><strong>FROM THE ARCHIVES</strong></div><figure class="op-interactive"><iframe allow="autoplay; fullscreen" frameBorder="0" height="100%" id="ivsplayer01" scrolling="no" src="https://player.ivideosmart.com/ivsplayer/v4/dist/html/iframe-src.html?iframeid=ivsplayer01&amp;key=e8c22c015ca9eafa76f1e3edfa03c603&amp;spid=3001339&amp;vid=1768611" width="100%"></iframe></figure><div class="iwantbar">Watch more in <a href="//www.iwantv.com.ph/">iWantv</a> or <a href="//tfc.tv/">TFC.tv</a></div>

US officials announced Tuesday they had recovered $3.6 billion of bitcoin stolen in 2016, throwing a light on the scams that surround cryptocurrency.

How criminals manage to steal cryptocurrency

News

Entertainment

Lifestyle

Sports

Metro.Style

More

Traffic

Manila

Horoscope

Business

How criminals manage to steal cryptocurrency

Joseph Boyle and Lucie Lequier,

Agence France-Presse

Published Feb 10, 2022 03:23 AM PHT

Read More:

cryptocurrency

bitcoin

crypto scam

ABS-CBN is the leading media and entertainment company in the Philippines, offering quality content across TV, radio, digital, and film. Committed to public service and promoting Filipino values, ABS-CBN continues to inspire and connect audiences worldwide.

Corporate

Investors

Governance

International Distribution

Corporate

Governance

Investors

International Distribution

NPC Seal of Registration

Privacy Policy

AI Policy

Terms of Service

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.

NPC Seal of Registration

Privacy Policy

Terms of Service

AI Policy

Advertise with Us

© 2025 ABS-CBN Corporation. All Rights Reserved.