Crypto gaming’s appeal is undeniable, offering advantages like reduced fees and enhanced security. However, its decentralized nature poses challenges, especially in the U.S. where regulatory oversight struggles to keep pace.
The absence of central control makes transactions vulnerable to scams, notably in online casino gambling.
Identifying fraudulent techniques is crucial for players to protect their information and funds. Distinguishing between legitimate US online casinos and fake ones becomes imperative in this landscape. As the U.S. grapples with regulatory challenges, efforts are underway to establish guidelines and oversight mechanisms, striking a balance between innovation and player protection.
In navigating the evolving crypto gaming landscape, proactive regulatory measures are essential. While the benefits are evident, a robust regulatory framework is crucial for cultivating a secure gaming ecosystem in the U.S. As the industry progresses, staying informed and advocating for responsible gaming practices will shape the future of crypto gaming in the country.
1. Deposit Theft
Also known as ‘sticky wallet’, deposit theft starts with a scamming site asking you to deposit money like any other reliable casino. The process is usually straightforward and your deposited amount will reflect in your account within a few minutes.
The problem comes in when you’re trying to withdraw your winnings and you can’t take out any funds. Fraudulent sites will either lock your account or demand that you go through impossible hoops to get it back. Because there’s no regulation for crypto transactions, there’s no authority to report your issues, so all you can do is leave a bad review and move on.
2. Rigged Casino Games
Contrary to what most people might expect, there are no genius moves or tricks to this scam. It simply involves deceiving gamers who play crypto games by making them think they are on a winning streak. Those who fall for this trap increase their deposits in hopes of making more wins and withdrawing more funds.
At some point, the funds suddenly disappear and the link to the gaming site stops working. Many people in such situations have tried getting their money back, but only a few have succeeded. Due to the recipient’s anonymity tracing the person behind the crypto wallet where you made the deposits becomes close to impossible.
Top 3 Largest Online Gaming Crypto Scams
It’s not uncommon to hear about online gaming companies being hacked and player accounts getting drained. Regardless of whether you’re playing at an online casino or any other platform, you should always be aware of the methods scammers are using to defraud crypto-based platforms.
Crypto Casino Stake Hacked for Over $40 Million
If you’re keen on following up with crypto news, you’ve heard of the Stake Casino hack that happened on September 4th, 2023. Attackers managed to steal over $15.7 million from Ethereum wallets and over $25.6 million from Polygon and BSC. Based on the blockchain analysis project called Cyvers, the theft was caused by a private key leak.
Stake co-founder Edward Craven has since come out to deny the claims, stating that the attack was due to a sophisticated breach targeting the company. On September 6, the FBI declared that Lazarus Group, a group of North Korean hackers, was behind the attack. Regardless of the cause, players lost thousands from their portfolios and no direct arrests have been made to punish the attackers.
Gala Games Co-Founder Claims Hundreds of Millions in Losses
Gala Games gaming company is going down the drain and no one seems to know who to blame. A lawsuit filed by Gala Games CEO Eric Schiemeyer alleged that the company’s director Wright Thurston stole $130 million in GALA tokens. Apparently, he did this through a complex web of obscure transactions starting from September 2022 to May 2023.
As a response to the lawsuit, Thurston explained that he was only selling some of his GALA tokens to purchase exclusive in-game items. He later counter-sued the CEO for misusing over $600 million of the company funds for personal projects like buying a private jet and real estate. Instead of refunding their players back, the company issued GALA v2 tokens to hide the scandal from GALA’s token holders.
Aurory Bridge Hacked For Over $1 Million
Many gaming platforms use a blockchain bridge to allow different blockchains to operate within the same space. That way, users can use tokens that run on specific blockchains to play on another. Aurory Gaming’s bridge was called SyncSpace and it allowed players to move assets between the game’s off-chain network and the blockchain.
In December 2023, this bridge was attacked on Camelot Exchange where the bad actor stole over 600,000 AURY tokens. The hack resulted in the company’s liquid assets declining from around $1.5 million to around $312,000. On top of this, AURY’s value dropped by 11%, since the attacker sold it off in bulk.
Tips to Avoid Crypto Scams
Dodging crypto scams is easy, and it starts with doing your research to ensure everything about a gaming platform checks out before depositing. You can do this by checking the reviews on Google and visiting the official site to look for licensing information. Lastly, double-check deals that are too good to be true, because most of the time they are just a scheme to run away with your money.