The Problem: We Lack Consumer Protection

In the crypto world, even basic transactions have become perilous, exposing users to a range of sophisticated scams and attacks. The risks affect everyone—from newcomers to seasoned investors—undermining trust and slowing broader adoption. As digital threats evolve, the challenge of securing assets has become a significant concern for all participants in the crypto space.

High Risks for All Users Regardless of their level of experience, all crypto users face substantial risks when interacting with digital assets. Advanced users can fall victim to scams due to the increasingly complex nature of these attacks. Newcomers, who may lack familiarity with secure practices, are particularly vulnerable. The learning curve is steep, and mistakes can lead to devastating losses, as scammers use social engineering and other sophisticated tactics to exploit both human error and technical vulnerabilities.

The Growing Impact of Phishing and Other Scams Quantifying the real extent of losses due to phishing scams and other crypto-related fraud is complex. Different reports from the FTC, Chainalysis, ScamSniffer, and investigations by figures like ZachXBT reveal significant variation in the data, and the actual scope may be far larger than any one report suggests.

The FTC reports substantial losses to cryptocurrency scams, with over $10 billion in total fraud losses in 2023, much of which involved crypto-related fraud. Specifically, the FTC noted that more than $575 million of these losses since 2021 stemmed from bogus investment opportunities, and nearly half of all crypto scam losses originated from social media platforms​(Federal Trade Commission)​(Federal Trade Commission). Yet, this data might not capture the full extent of phishing attacks specifically or reflect the high-value incidents that disproportionately affect a few victims.

More granular data from ZachXBT highlights just how large some individual cases can be. In one shocking incident in August 2024, a single victim lost $243 million to a phishing and social engineering attack, in which scammers gained access to their 4,064 Bitcoin. ZachXBT documented this heist in a detailed thread on X (formerly Twitter), including blockchain transaction evidence and videos of the criminals’ reactions.

Finally, ScamSniffer estimates over $314 million was lost to crypto phishing scams in the first half of 2024 alone, according to their Mid-Year Phishing Report. This shows a sharp rise in phishing attacks targeting high-value assets.

The Role of Security Tools While security tools like Wallet Guard and Kerberus Defense offer critical protection by detecting malicious transactions and alerting users to potential threats, they are not infallible. These tools provide valuable first-line defenses, but they cannot guarantee complete security — they are useless against malware and many other forms of scams. Scammers continually develop new methods to bypass these safeguards, which means that even the most vigilant users can still fall victim to fraud. This ongoing evolution of scam tactics necessitates an additional layer of security that cannot be fully provided yet.

The Need for a Safety Net Despite the availability of sophisticated security tools, there remains a crucial need for a robust safety net to protect users when preventative measures fail. A theft coverage solution would provide this much-needed safety net. By covering losses from a wide range of digital threats, Fairside ensures that users are not left to bear the full brunt of these attacks alone. This approach not only helps to mitigate financial losses but also restores confidence among users, encouraging broader participation in the crypto space.

By offering a safety net that complements existing security tools, Fairside aims to create a more secure and welcoming environment for all users, from beginners to experts. This solution is essential for fostering a resilient digital economy where participants can confidently manage their assets, knowing they are protected against the worst-case scenarios.