Theft of $400m Worth of Virtual Funds Earned Through ICOs due to Hacking

As Bitcoin prices intermittently hiked and declined in 2017, certain types of investors inclined towards one thriving tool for raising funds called ICO i.e. Initial Coin Offerings to gain potential profits.

Ernst & Young has conducted one research deeply analyzing the dangers involved while expending for crypto-currency projects on the Internet and found that hackers' attacks led to loss or theft of over 10% of virtual incomes reaped via ICOs. The research released on January 22 reveals that for 372-and-more ICOs analyzed wherein fresh digital currencies were disbursed to purchasers, the security company discovered that about $400m out of the aggregate $3.7bn virtual income churned till date were lost in theft.

ICOs hacked and stolen was largely through phishing attacks wherein a maximum of $1.5m ICO funds were lost to theft every month. Furthermore, from late 2017, ICO fund raising had been declining in speed. During November, the target ICO fund raising was less than 25% as against 90% during June. Ndtv.com posted this, January 23, 2018.

The research states that hackers get drawn to the rush, no centralized authority functioning, irreversibility of block-chain transactions as well as information chaos. Project designers pay more attention to wooing investors while there's frequent absence of prioritization of security. Hackers effectively capitalize the largely glorified and big-rated ICOs by targeting attacks on them.

ICOs are even more risky in that token issuers' credibility is declining owing to the number of projects exploding. Indeed, the severity of ICO frauds has given into companies which are experts in assisting investors who want to file lawsuits against dubious ICO issuers.

Businessmen find ICOs very convenient to raise funds, particularly when venture capitalists pass over their ideas. However, that has as well resulted in ICOs of companies having just beyond certain white paper.

There are also investors scared of scammers. Lately, the SEC came hard on one ICO having the name PlexCoin which reaped funds of some $15m through the pledge of thirteen times more profit over not even a month, describing the operation a scam. Ethereum cofounder Vitalik Buterin cautioned investors of one initial coin offering asserting it had ties with him.

» SPAMfighter News - 1/30/2018