Tuesday, August 16, 2022

Transparent Crypto – A nightmare for crypto imposters

The Takeaway:

Since the world of cryptocurrencies is not regulated by the institutions, it attracts a lot of criminal activities. To acquire accurate information on the crypto frauds, and scams is not an easy task. In this article, we cover the cryptocurrency hacks which have invaded the year 2019 of the crypto industry.

Cybercriminals have webbed $4.3 billion from cryptocurrency exchanges, users and investors. 

CipherTrace, a Blockchain security company reported that up till now in 2019, illicit activities in the crypto world comprising of thefts, scams and other defalcations of funds from cryptocurrency users and exchanges had followed losses of around $4.3 billion. Hackers, in the first quarter of the year, robbed more than $124 million from trade platforms, totaling the theft to $227 million so far. Further, Bitfinex lost a massive amount of $851 million. According to the study, the smart bad actors primarily used BTC for trading drugs and funding terrorism, while the use of other crypto coins like ETH, LTC, XMR, BCH, and DOGE was broadly employed to dark markets and malware attacks.  

Crypto world is as grey as any other. Today, it seems like a race between the crypto positives and negatives. You can read the latest startup news for more updates on the cryptocurrency industry. As much ascends the cryptocurrency acceptance and usage, that much increases the crypto crimes and scams. If you want to know more about Blockchain Technology, you can read this article on What is Blockchain and understand the basic concepts of blockchain & cryptocurrency.


The fancy Ponzi PlusToken

CipherTrace cited the PlusToken scheme as the most extensive single disaster that defrauded the users and investors of around 70,000 Bitcoins and 800K Ethereum. When summed up, the Ponzi scheme looted an overwhelming number of nearly $2.9 billion from the people of China, Japan, and South Korea. However, the scammers couldn’t escape. The Vanuatu authorities arrested the six Chinese citizens associated with the hoax.

The transparency of cryptocurrencies has proved to be the gallant knight. Although the swindles invade the digital world, yet, a significant number of them are tracked, and people behind them are busted. 


The best forgers win the sentence

On 10 September, the Portuguese Judiciary Police and Europol tracked down and captured one of Europe’s most significant falsified gangs. In action since 2017, the group of five sold fake notes in exchange for the crypto coin King, Bitcoin. The cops seized almost 70,000 euros in counterfeit banknotes, and as reported, 1.3 million euros were sold in the past two years. According to the authorities, the forgery was of some best quality exhibiting traits such as watermarks and holograms. 


The real fake

The UK is evolving as one of the crypto crime hubs. The frauds within the digital currency industry pose a real threat to investors. FCA stated the loss of almost $34.4 million to scams in the forex and cryptocurrency sector in the 2018-2019 fiscal year. In June 2019, Europol, in union with the UK’s South West Regional Cyber Crime Unit and NCA, arrested six people responsible for a bitcoin scam worth $27 million. The crime ring, including five men and one woman, originated a “typosquatting” hack which entails the creation of a fake website and an identical web address. Such scams may prove to be very perilous as people are unable to realize they have stepped onto another platform and enter their credentials, unknowingly presenting the information to the hackers. The cyber theft majorly targetted bitcoin users and over 4000 people in 12 nations fell victim to this foul play. 


Too young for crypto fun

Japan faced the massive storm of cryptocurrency theft when $610 million in digital money was stolen from the citizens last year. Although no crooks were caught then, this year the Japan police succeeded in detaining an 18-year-old for stealing $130K worth of crypto coins. A resident of the city Utsunomiya, the scammer, profited on a security issue on Monappy, a crypto wallet network and sent multiple transfer requests of Monacoin virtual currency to his private address. Post claiming the coins, he moved them to other exchanges and later converted them into the traditional money to buy a smartphone and other gadgets. Unknown to the fact that he affected over 7735 users, the Japanese adult swindler currently faces computer fraud and concealment of criminal proceeds charges. Simultaneously, Monappy has been out of service since September 2018. 

Besides this, Japan’s Bitpoint, a crypto trading platform, has suffered the loss of $32 million of funds after being hit by a hack. The scam targetted the hot wallet, which involved five crypto coins, including Ripple, Bitcoin, and Bitcoin Cash


The fraudster brothers

Crypto exchanges are a lucrative aim for hackers. The Israeli police cyber unit caught two brothers, Eli and Assaf Gigi, for committing a multi year phishing scheme and engaging in the Bitfinex hack of 2016. The siblings from Jerusalem stole around $100 million in cryptocurrency and hacked virtual wallets that possessed thousands of Bitcoins. They enticed investors from crypto trading forums and accumulated the traders’ login and wallet data. Next seen was the funds withdrawn and transferred to the brothers’ accounts.

The miner of scams

On 21 May 2019, Dutch police apprehended a former entrepreneur for fraud, money laundering, and forgery. The man was the director of firms where people could buy computers for mining. The sharp bad brain conned investors in a fake bitcoin mining operation. Where people thought of gaining money from the mining of BTC, Barry van Mourik had commenced his fraud. The 33-year old operator of a mining firm accrued fund and initiated a scam worth $25 million. Around 100 investors invested 100 million euros. When examined, the authorities figured that mining computers were never actually purchased and the hacker had spent the money on all kind of luxurious things such as cars, travel, gambling, and more. 


Sad for patrons, sadder for crooks

India, making moves in giving a hard time to Crypto enthusiasts, is not holding back in proffering the same to the crypto criminals. In June, the Madhya Pradesh Police busted an international gang that tricked naive victims into a fraud of Rs 50 crore in the business of outlawed cryptocurrency. The Special Task Force (STF) arrested a couple who was the bigwig of the swindling group. The accused had set up a sham firm on the fake website of the Hong Kong share market with a server in Jaipur. The case came into light when one of the victims reported police about the fraud. When further investigated, a transaction worth Rs 3 crore was detected from the account of the captured. They would lure investors into investing in digital money by claiming to multiply their investment.

In February, a group of four was taken into custody for carrying out a crypto racket that amassed an estimated Rs 100 crore by looting people in Mumbai, Surat, and other states. The crooks had launched a cryptocurrency dubbed “Cashcoin” and enticed investors by assuring to double their funds. 


Spain suffered the crypto fraud pain

Spanish law enforcement arrested 35 people for counterfeiting banking cards and laundering the benefits attained through bitcoin. As per reports, the organization had earned more than 600,000 euros and bleached over one million. The group operated via three paths: phishing – through email, skimming – cloning the physical cards, or Bin attack fraud – obtaining credentials from credit card receipts. 

Prior to this, eight people were caught for performing a money-laundering plot involving cryptocurrencies. 


The innovative scammers

This year, Dubai cracked the first case of Bitcoin crime. An Asian had set up a profile posing as a businessman interested in buying Bitcoins and duped three GCC residents by stealing $102,179 from them. He attained their passwords and transferred the amounts to his accounts. 

Previously in March, the Dubai police officials charged three Pakistani citizens for robbing approximately $250,000 from a group of Chinese investors. The Pakistani men lured the Chinese businessmen into a purchase of million dollars worth of Bitcoin. When convinced, the businessmen arrived at the apartment of the scammers where they were tied and physically restrained. Each of the accused is sentenced to imprisonment. 

In addition to all these, the scammer that stands top and alone is North Korea. The nation is on the road of looting every section of crypto exchanges all over the world and not the public, but it is the government that rides the crime wheels. 

Cybercrimes though an unwanted part of the internet, yet subsists. It is not the cryptocurrency that carries out these fraudulent activities, but it is the people who take the wrong track to earn easy. We cannot certainly halt or seize these criminal minds but can definitely try to stay alert. To avoid being conned, keep an eye out for symptoms like Useless tokens, company offering guarantees, and high returns, unrequested offers to invest in ICOs, and unreliable claims about price growth. 

Disclaimer: The article reflects the opinions of the author and is not representative of Chaintimes’ views.
The article does not offer any investment advice. User discretion is advised when investing in or trading with cryptocurrency. Extensive and diligent research should be carried out by the reader before making a decision.

Ramon AnderSon
Ramon AnderSon
Ramon is a senior market research analyst who is very passionate about bitcoin. He has a degree in Applied Science from Assumption College, Worcester.

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