Here’s another reason to be leery of the initial coin offerings being done at a staggering pace in the cryptocurrency world: there’s a one-in-10 chance you’ll end up a victim of theft.
Phishing scams have helped push up criminal losses to about US$225 million this year, according to Chainalysis, a New York-based firm that analyzes transactions and provides anti-money laundering software. In such scams, investors are tricked into sending money to internet addresses pretending to be funding sites for digital token offerings related to the ethereum blockchain technology.
More than 30,000 people have fallen prey to ethereum-related cyber crime, losing an average of $7,500 each, with ICOs amassing about $1.6 billion in proceeds this year, Chainalysis estimates.
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“It’s a huge amount of money to generate in such a short period of time,” said Jonathan Levin, co-founder of Chainalysis, whose software and database are used by some of the largest bitcoin companies and U.S. law enforcement agencies. “The cryptocurrency phishers are doing pretty good against all the other types of criminals that are out there.”
Indeed, the huge amount of wealth that has fallen prey to cyber criminals is approaching the losses incurred by robberies in the U.S. for the entire year of 2015, which stood at $390m, according to statistics released by the Federal Bureau of Investigation.
ICOs are digital token sales typically that raise ether, with users transferring the funds to addresses provided by startups. Investors, sometimes eager to get early access to new token offerings have been tricked into providing their credentials to fake websites through targeted email campaigns, twitter posts and Slack messages, said Levin.
Ether rose 0.1 per cent to $324.17 on Thursday, according to data from coindesk, while bitcoin rose 0.2 per cent to $4,201.
Most attacks involve creating websites or social media accounts that sound similar to the real ICO project. Levin gave the fictional example of a project named "illuminate," which an imposter might fake by spelling it as "iIIuminate." Using the fake account, they would solicit potential investors to send money to the criminal’s address.
His firm compiled the data by identifying so-called digital wallets used by scam artists. That information is usually public because criminals widely circulate it, hoping to fool investors into sending them money.
Other common forms of crime involve tapping into project loopholes. The DAO, or decentralized autonomous organization, is a smart contract project built on top of ethereum that was intended to democratize how ethereum projects are funded. A bug in the system was exploited and that led to the theft of $55m worth of ether at the time.
Levin didn’t provide data for bitcoin-related cybercrime, and not because it is any safer. He said such data is harder to track as scams are usually specific attacks on individual holders, rather than ICO-related campaigns which try to dupe many people at once.
“The overall figures mean there are infrastructure that we need to build to help prevent people from getting abused,” said Levin.
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Killing of Qassem Suleimani
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MORE ON TURKEY'S SYRIA OFFENCE
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
BEACH SOCCER WORLD CUP
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Uruguay
Mexico
Italy
Tahiti
Group C
Belarus
UAE
Senegal
Russia
Group D
Brazil
Oman
Portugal
Nigeria
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The Africa Institute 101
Housed on the same site as the original Africa Hall, which first hosted an Arab-African Symposium in 1976, the newly renovated building will be home to a think tank and postgraduate studies hub (it will offer master’s and PhD programmes). The centre will focus on both the historical and contemporary links between Africa and the Gulf, and will serve as a meeting place for conferences, symposia, lectures, film screenings, plays, musical performances and more. In fact, today it is hosting a symposium – 5-plus-1: Rethinking Abstraction that will look at the six decades of Frank Bowling’s career, as well as those of his contemporaries that invested social, cultural and personal meaning into abstraction.
Killing of Qassem Suleimani
