Report shows that ICOs are now a big target for hackers
Hackers target ICO
Initial coin offering has become part of the cryptocurrency world because it’s now the biggest source of income for startups. Through ICO’s companies are able to raise large amount of capital. It similarly operates to how companies list themselves in stock exchanges. The ICOs platforms are developed through the Blockchain technology.
The popularity of cryptocurrencies has seen many other companies come up to compete with Bitcoin and Ethereum. These startups have seen different ICOs receive a large capital investment for different projects. These huge capitals have now attracted criminals because where there is wealth there is always criminal interest.
According to a recent report by Fortune more that 10% of the money raised in ICOs between 2015 and 2017 have been stolen through hacks or lost in crypto ether. It’s estimated that more than $400 million have been stolen by hackers. In an effort to attract investors many companies launching the blockchain services never concentrate on security. The main aim is the amount collected from the ICO’s these companies never protect themselves from the hackers and neither do they protect the investors buying the tokens.
According to Ernst and Young more than $3.7 billion was raised between 2015 and 2017 by 372 ICO’s. This is a huge amount for startups, and that could be the reason hackers are targeting the industry.
The report from Ernst and Young states that ICOs are now a soft target for hackers:
“Hackers are very attracted by the rush and the absence of the centralized authority. More to that Blockchain the irreversibility of Blockchain transactions make the transactions a good target. The founders of these projects prioritize on attracting investors instead of looking at the security aspect and this gives the hackers an advantage.”
In August it was reported that cybercrime had increased with Ethereum’s popularity because of the smart contracts which allow developers to create their own applications. This application seems to be very important to hackers as transactions cannot be reversed or traced.