A report was published July 10 by Whale Alert, which describes itself as the largest provider of blockchain tracing and analysis, on the Medium website.

Whale Alert, in conjunction with Scam Alert, have analyzed hundreds of thousands of reports from various sources, visited hundreds of websites and gathered data from hundreds of thousands of bitcoin addresses to conclude that “crypto crime” pays, and very well.

There are many forms of scams, among the most common are giveaways, sexual extortion, fake exchanges, and Ponzi schemes. The same bitcoin website alerts users to about 15 ways in which one can be scammed. 

According to the report, the most serious is that the scammers are not at risk, while the lives of the people who invest are destroyed. 

“All it takes is a one-page website, a bitcoin address, and a good deal of advertising on YouTube. In some cases, there are badly made websites, full of spelling errors that have made up to 1.5 million in just 6 months and are still running,” the report states.

Whale Alert can track all bitcoin transactions because every transaction is recorded in a type of “accounting book” called a blockchain even though all transactions are anonymous, resulting in a myriad of crimes from money laundering to terrorist financing. 

This market is not regulated by any government or banking entity and as it is a growing trend as more and more businesses accept the virtual currency, the ways to defraud people are also evolving. Where before it seemed that it was one person scamming people, now it seems that there is a team of professionals behind it.

Most common scams

In free giveaways, scammers try to take advantage of people by offering free gifts of bitcoins or other digital coins in exchange for sending a small amount to register, or by providing some personal information. In this way, they accumulate bitcoins in small amounts to large amounts. 

Impersonating someone else: This method has proven to be very difficult to detect, since nowadays fake accounts can be created with photos of personalities, actors, or celebrities, who until they themselves publicly warn that such an account is not theirs, many people enter and make transactions on the fake account. With the famous technique of deepfake today, you can record videos with other people’s faces and say what you want. 

Since the elimination of the gold standard, manipulating the economy with “bank runs,” laundering drug money or financing terrorist activities has become relatively easy in this digitalized world. So, thinking about the wide acceptance of a virtual currency as “money” should be a concern for everyone and not a trend.