Advertisement
Blockchain
TechTech Trends

Web3 security companies emerge in China amid mounting crypto thefts and few legal protections

  • Web3 security firms are offering tools like browser extensions and blockchain blacklists to help users in China protect themselves when the law does not
  • US$3.2 billion in cryptocurrency was stolen in 2021, and even celebrities like Jay Chou and Bill Murray have fallen prey to NFT scams

Reading Time:4 minutes
Why you can trust SCMP
0
More than US$27 trillion worth of cryptocurrency has been stolen in 827 attacks since 2012, according to Xiamen-based blockchain security firm SlowMist. Photo: Shutterstock
Yaling Jiangin Shanghai
When Wu Caizeng lost a 20,000-yuan (US$2,800) non-fungible token (NFT) to a phishing scam in September, he sought help on Twitter, where he publicised his thief’s public blockchain address. However, the anonymous nature that characterises much of the crypto world left him with no practical way to recoup his losses.

“I’m so stupid,” he said in his post, chastising himself for clicking on a fraudulent link pretending to be from the official Twitter account of a game he played. “I made a super basic mistake.”

Twitter cards, Apple’s AirDrop links, Discord messages, and even tokens on decentralised exchanges have all become avenues for crypto scams, which have become more frequent in recent years. Cryptocurrency thefts rose more than 500 per cent last year to US$3.2 billion, according to a 2022 crypto crime report from blockchain data platform Chainalysis.

The problem is particularly acute in China, where Wu lives and cryptocurrencies are not protected by law, but many people are still trading related assets to avoid missing out on opportunities in the relatively nascent market. As a result, Web3 security companies have been cropping up promising to help people secure their blockchain-based assets.

“Security companies, ‘white hat’ hackers and customised tool makers are part of the main force that drives Web3 security,” said Mike Li, who left Chinese cybersecurity giant 360 Security Technology to found GoPlus Security in 2017.

Li likened his firm’s offerings to a decentralised version of the cybersecurity solutions offered by Russia’s Kaspersky Lab. The service allows any application on Web3 – the widely used term to refer to a World Wide Web decentralised through the use of blockchain and similar technologies – to use the GoPlus application programming interface (API) to flag blockchain addresses with red, yellow or green marks as a signal of a transaction’s risk level.

The need for Web3 security solutions has become more apparent with an increasing number of high-profile crypto scams. Even celebrities have been hit, from actors Bill Murray and Seth Green in the US to Taiwanese Mandopop sensation Jay Chou, who lost a valuable Bored Ape Yacht Club NFT to a phishing website in April.
Advertisement