Over the last couple years, scammers seem to have found the perfect storm by combining the cryptocurrency boom with the common ponzi/pyramid scam.
Many of the prominent online scammers and a few new crooked young pups have been riding this wave in splendid fashion. Although crypto may not be as anonymous as some people like to believe, the promoters of these scams are loving getting paid in Bitcoin especially with it’s value skyrocketing in the last year(still way up even with the recent 60+% plummet from it’s December high). Hell, even though I’m not a crypto guy, I think it would be pretty fun to get paid in a hot commodity like BTC right now. The scammers can then decide whether to sell off their BTC and hide the cash, use it to buy goods and services wherever BTC is accepted, use it to fund their next crypto scam, or play around with trading some BTC for altcoins.
The Continuous Stream Of Cryptocurrency Scams
Over the last few years we’ve had OneCoin, BitConnect, USI-Tech, BTC Global, DavorCoin, R2B Coin, Mining Max, KashhCoin, et. al. bilking millions of people out of billions of dollars in an industry that hadn’t been subjected to a whole lot of regulatory scrutiny.
In addition to this huge onslaught of fraudulent cryptocurrencies and ICOs, there are also quite a few more traditional scams that have resorted to only accepting the more popular cryptocurrencies as payment from new members. While this does limit
The Short Term Effect On Legitimate Cryptocurrencies
My condolences to those of you who are involved in the legitimate cryptocurrency world, but you are likely to get royally screwed in the not so distant future by the hoards of cryptocurrency scammers saturating the internet over the last couple years. To borrow a partial quote from the TV show Fargo, “There’s gonna be a reckoning one day, brother.”
The scammers will be off to pervert whatever the next hot trend is and the true cryptocurrency believers will be left with the aftermath, most likely bannings, major regulations, etc. IMO, much of that was probably going to come anyway, but the ridiculous amount of scammers in the mix is going to continue to speed up the process that has already begun.
So far, some of the repercussions we’ve seen caused by the fallout of these scams include banks banning crypto purchases, authorities cracking down on ICOs, and social sites like FaceBook banning crypto ads. U.S. institutions such as Bank Of America, Citigroup, JP Morgan, Capital One and Discover have banned customers from buying crypto with their credit cards.
And quite frankly, I don’t blame them one bit for these bans. Due to the rampant amount of crypto based scams polluting the internet, they will all be seeing an increase in chargeback attempts by customers that were defrauded and they may end up eating hundreds of millions in losses.
Now there will be some that will whip out one of the classic scammer playbook lines and claim that it’s their money and they can do whatever they want with it. Sorry folks, in this case it isn’t.
From what I’ve read, debit cards can still be used. So if you want to risk money from your savings or checking account and wish to accept the minimal protection from loss that comes with that gamble, you’re apparently still free to do that. But if you want to use a credit card, you are not using your own money and I’m perfectly fine with banks protecting their own assets by not letting customers gamble on a relatively new industry rife with scams.
Now if it sounds like I’m a fan of the banking industry, I’m not. Personally, I think there is about as much corruption in corporations as there is in the crypto world. And it won’t surprise me if the banking industry uses losses to cryptofraud as an excuse to raise fees and interest rates.
As authorities slowly catch up to this new hotbed of cybercrime we’ll find out just how anonymous cryptocurrencies can be. I think many scammers who don’t truly understand crypto may be in for a rude awakening when all the dust settles.
In the end, whether it’s in cryptocurrency or more traditional currency, smart scammers move their loot(and themselves) to scam friendly havens if they want to avoid the authorities.
The online scammers that I’m familiar with love buzzwords and right now Bitcoin, other cryptocurrencies, blockchain, ICO, etc. are all the rage just as things like penny auctions, autosurfs, ecommerce, blogging, social networks, etc. have been in the past. This too shall pass and most of the regular scammers will be on to the next hot trend, twisting it into an easy money making scam in an attempt to fatten their wallets.