January 24, 2018 / 11:48 AM / in 5 months

ICO funded projects hit by 100 cyber attacks a month: report

MOSCOW (Reuters) - Projects which raise funds through “initial coin offerings” (ICOs) are attacked by cyber criminals 100 times a month on average, a report said, underscoring the risks of investing in cryptocurrency ventures online.

A padlock is displayed at the Alert Logic booth during the 2016 Black Hat cyber-security conference in Las Vegas, Nevada, U.S. August 3, 2016. REUTERS/David Becker

The research, published by Moscow-based cyber security firm Group-IB on Wednesday, was based on an analysis of 450 attacks on ICOs since the beginning of 2017. Attempts by hackers to steal money from ICO projects increased tenfold over the period.

Group-IB also took part in a study published this week by Ernst & Young which showed that roughly $400 million of the $3.7 billion raised via ICOs to date had been stolen.

The findings come amid a cryptocurrency investing craze, with young companies raising hundreds of millions of dollars online to fund projects, with often little more than a handful of employees and an outline business plan.

A copy of bitcoin standing on PC motherboard is seen in this illustration picture, October 26, 2017. Picture taken October 26, 2017. REUTERS/Dado Ruvic

There is also growing scrutiny from regulators and investors, some of whom say they have been misled or defrauded via ICO schemes.

Group-IB said ICOs and cryptocurrency investors were particularly at risk from so-called phishing attacks - when hackers spoof emails and websites to steal passwords and personal information - with some groups who previously targeted banks now stealing as much as $1.5 million a month this way.

In some cases, hackers have also attacked and doctored ICO project websites, changing the information so would-be investors send their money to the wrong digital “wallets” used for storing cryptocurrencies.

“Most attacks use traditional and well-proven techniques, which are also very effective for stealing cryptocurrencies,” said Ruslan Yusufov, director of private client services at Group-IB. “Lots of projects underestimate cybersecurity risks, which leads to an avalanche of threats and successful thefts.”

Reporting by Jack Stubbs; Editing by Alexander Smith

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