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Hackers stole his entire encrypted account of $165,000. The FBI says it can’t help it.

A few days before Christmas last year, Philip Martin sat in front of his computer checking the balance of cryptocurrency. It was the beginning of what would become, for him, an ongoing nightmare.

Martin told NBC News that he believed he was writing the web address of cryptocurrency exchange Coinbase, the largest and most popular company for consumers to store their digital money. But in fact, he says, the hackers tricked the url, altering it so little that it tricked his web browser — prompting him to automatically enter his login and password.

The scammers now have all the information they need to steal his savings – and they do. Martin has become the latest victim of what has been a wave of cryptocurrency hacks and thefts, one that experts say raises questions about whether better regulation is needed.

Philip Martin.Dana Patrick

“It was very disappointing,” Martin said, as the value of Ethereum, a popular cryptocurrency, topped $165,000. “I had panic attacks.”

Martin said he was able to track where the thieves moved his stolen crypto, since all Ethereum transactions are posted to the public ledger. Contact local and federal law enforcement. But to make matters worse, the FBI field office in Los Angeles eventually told him his loss wasn’t big enough to merit an investigation.

Special Agent Elizabeth Hammond wrote in a letter: Email Martin provided to NBC News.

Laura Emeller, a spokeswoman for the FBI’s field office in Los Angeles, said she would not comment on any specific case.

“As with many prolific and sophisticated schemes, we will not be arrested or sued our way out of this,” she said. Whether it is individuals or companies, education is key. We urge people to visit IC3.gov (Internet Complaint Center) for the latest trends.”

Martin also blames Coinbase, which describes itself as a “secure online platform for buying, selling, transferring and storing cryptocurrency.”

“Coinbase is basically saying that they are not responsible, and each user is responsible for securing their own device, laptop or phone,” he said. “These cryptocurrency exchanges do not have any regulation that forces them to be on the side of the client and provide protection to help in the kind of situations for which, in my opinion, they are responsible for not providing enough cybersecurity on their own URL.”

A Coinbase spokesperson would not comment on the specific case, saying in a statement “Coinbase customers should also be wary of phishing attempts and never click on a link or engage with email that is not from the Coinbase.com domain.”

The company added, “Scams, scams, and other crimes can have a significant impact on customers, and we take extensive security measures to ensure that our customers’ accounts remain secure. We regularly educate our customers on how to avoid cryptocurrency frauds and report known frauds to appropriate law enforcement authorities. We encourage all of our customers to take important steps to secure their online accounts.”

Martin’s kind of fraud isn’t the only way consumers have lost cryptocurrency. In many cases, cryptocurrency exchanges have been hacked. The most famous was the 2016 Bitfinex breach, in which hackers stole Bitcoin, which was recently valued at around $4.5 billion. In February, the Department of Justice announced that it had recovered $3.6 billion of that amount.

One analyst has counted at least 46 exchange hacks since 2012. The losses are difficult to quantify due to the fluctuations in the value of different cryptocurrencies, but they appear to be in the billions of dollars.

In one of these recent hacks, crypto exchange Bitmart pledged to use its own funds to recoup customer losses of up to $196 million.

Lawyer Urzula McCormack, a partner at Hong Kong-based King & Wood Mallesons who specializes in cross-border finance and technology, says the picture of the threat is actually better than it was when cryptocurrency first came out.

“Nevertheless, there is no doubt that there are also areas where people are at risk,” she said. “There is a very high degree of fraudulent activity that is happening. We also have regular hacking risks that happen that you really need to protect against.”

In March, President Joe Biden issued an executive order designed to spur action among government agencies to protect consumers from the dangers of crypto, and dozens of bills are pending in Congress that would regulate crypto to one degree or another.

McCormack said that some countries have banned advertisements for crypto investments, but such advertisements appeared more prominently in the United States during the Super Bowl, confirming the interest in cryptocurrency as an investment.

But Martin urges caution.

“I think there is a lot of great potential,” he said. “I think now, I’m personally reluctant to invest until there are better consumer protection laws.”

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