Over $1 billion stolen in crypto thefts and exit scams last year (and the Lightning Network is partially to blame)

Over $1B stolen in crypto thefts, exit scams in 2018 (and Lightning Network is partially to blame)

Last October, CipherTrace predicted that more than $1 billion in cryptocurrency would be stolen before the end of the year. The company, which monitors legal compliance of blockchain transactions, said that there would be more than four times the amount of crypto thefts and exit scams than what was seen a year earlier, but what the firm didn’t realize was how far above their prediction the stolen amount would go. According to a new report from the company, over $1.7 billion went missing through a variety of illicit activity. 

According to CipherTrace’s report, over $950 million in crypto was stolen by hackers – 3.6 times more than what was stolen the previous year. In addition, another $725 million was forever removed from their rightful owners through a series of fraudulent initial coin offerings (ICO), Ponzi schemes and phony exchange acts.

The company asserts, “Interestingly, even with the downturn in the prices of many cryptocurrencies, the total dollar value of tokens stolen and scammed was much higher in 2018 than 2017, which further points to the increase in security threats against exchanges and sophistication of online criminals.”

CipherTrace was able to identify the “Top 10 Trending Crypto Threats,” which will hopefully help investors, as well as the entire crypto community, become more aware of how to stop the flood of lost money. On its top ten list, one entry stands out and should give everyone in the crypto industry a strong reason to be concerned.

Coming in at number 7 on the Top Ten Trending Crypto Threats list – even above crypto ransomware and email extortion – is the Lightning Network. CipherTrace points out that Lightning Network transactions are one of the primary causes of lost funds. The firm describes the transactions by stating, “Enabling anonymous bitcoin transactions by going ‘off-chain’ and now scaling to $2,150,000.”

Bitcoin SV (BSV) proponents have always argued that off-chain scaling was not necessary; that it is perfectly acceptable – and possible – to evolve a blockchain to handle large numbers of transactions. This is one of the main reasons why BSV has been adamant about adhering to the original Satoshi’s Vision, which asserted the same thing, and why BSV developers have already shown that large, 64MB blocks, as well as a record-setting 103MB block, are possible. 

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As the crypto industry evolves, it will become apparent that Satoshi was right when he first designed digital currency, and that all of the changes developers have been determined to introduce do not expand the capabilities of the network. BSV will continue to adhere to the original design and understands that there is no reason to introduce changes for change’s sake.

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