Shafnaa Shamsuddin, group chief financial officer of an outdoor advertising company in Dubai, started buying cryptocurrencies and machines to mine the digital tokens in 2023. But she found it hard to find facilities that would host the machines in the UAE.
She bought 15 machines and found someone willing to host them, but he died two months later. She then linked up with someone who claimed to be “a renowned crypto facilitator in the UAE”, she said.
“He promised to help build a legal hosting facility for the mining machines. He said there was a facility available and I transferred Dh50,000 [$13,613] as a three-month advance to run my machines. However, for months, I did not hear from him on when the machines would be up and running.
"Later, he refused to return my money or set up the facility, but I managed to retrieve the machines,” Ms Shamsuddin said.
As the popularity of cryptocurrencies grows, attackers can become more incentivised, a new study from blockchain data platform Chainalysis has shown. The value of cryptocurrencies stolen in 2024 has hit about $2.2 billion, with more than 60 per cent of that value coming from North Korea-affiliated attacks, the study found.
That figure is a more than 21 per cent leap from last year and marks a fourth consecutive year of breaching the billion-dollar mark, the New York blockchain company said in a preview of its 2025 Crypto Crime Report. That is also the third-highest value for stolen crypto since Chainalysis began tracking data in 2015, trailing 2021's $3.3 billion and the record $3.7 billion in 2022.
The number of reported hacks in 2024 climbed for a second straight year, up 7.4 per cent at 302, from 282 in 2023, Chainalysis said.
“Do your due diligence and research thoroughly. Only put money in cryptos that you can afford to lose,” Ms Shamsuddin warned. “It can be very addictive and you may swipe your credit card or take a loan to buy mining machines. But I wouldn’t discourage anyone from trading or mining cryptos because it is a very good way to learn the future of transactions. I have also directly invested in Bitcoin and non-fungible tokens.”
Chainalysis does not break down stolen crypto data by region. However, Arushi Goel, its head of policy for the Middle East and Africa, said that jurisdictions such as the UAE, where virtual asset service providers have to comply with policies fighting money laundering and terrorism financing, make them much safer to host crypto operations.
“It’s important to keep in mind that malicious activity accounts for just a tiny fraction of the overall on-chain crypto activity”, which still highlights the huge opportunities in digital assets, Mr Goel told The National. “So while investors must certainly prioritise security and best practices, this shouldn’t overshadow the immense potential and their participation in this space,” he added.
The cryptocurrency industry has struggled with a spate of challenges, most notably regulators attempting to establish some control over the industry amid questions over how the sector operates and the opportunity for cyber criminals to exploit it. The situation came to a head in 2022, with the implosion of several large companies including Celsius Network, Three Arrows Capital and, most prominently, Sam Bankman-Fried's FTX.
However, arguably the sector's best bull run has happened since November, particularly after Donald Trump won the US presidential elections, riding on a campaign that embraced a pro-cryptocurrency stance. Bitcoin, the world's first and biggest cryptocurrency, soared past the $100,000 mark on December 5, then pushed further upwards to another record of more than $106,500 on Monday after the president-elect suggested creating a strategic reserve for it.
However, Bitcoin retreated on Thursday after US Federal Reserve chairman Jerome Powell said that the central bank has little appetite for holding a stockpile of the cryptocurrency.
Still, since the November 5 polls, the price of Bitcoin has surged by nearly half and was hovering above $100,000 as of Thursday, data from CoinMarketCap shows. It has a market capitalisation of about $2 trillion, making up the majority of the overall crypto sector's $3.5 trillion.
Anna Zeitlin, partner in FinTech and financial services at law firm Addleshaw Goddard, says that despite the huge increase in crypto activity in the Middle East and North Africa region, the number of crypto-related crimes is not increasing.
However, there has been a steady increase in the use of ransomware activities in the crypto space. This is probably driven by hackers who can still stay one step ahead of the cybersecurity curve, she warned.
“The general downward trend has been spearheaded by crypto companies improving their security infrastructures. For crypto companies to survive and thrive in the ever-competitive landscape, they need to take security seriously. Customers are able to be more picky with their providers, and will steer away from platforms that have a poor security record,” Ms Zeitlin said.
“Similar trends are being seen internationally. Also, globally we are witnessing a growth in crypto tracking companies who are able to assist law enforcement agencies trace the proceeds of crime and locate criminals. These companies sometimes employ ex-hackers in order to stay at the forefront of technological developments. These companies are likely to expand into the Mena region as the crypto industry expands.”
The crypto community is excited by Mr Trump’s promise of deregulating the crypto industry. “This excitement has spread to our region and will mean the value of certain cryptocurrencies increasing enormously. A growth in all aspects of the industry is to be expected,” Ms Zeitlin said.
