Bitcoin Scams Stole $24 Million In BTC During Coronavirus Pandemic

Scammers have stolen $24 million worth of Bitcoin in the first half of 2020, according to data gathered by crypto tracking tool Whale Alert and scam information site Scam Alert. While the world is facing the coronavirus pandemic, the scammers have been busy raking in millions worth of cryptocurrency from unsuspecting victims.

The unfinished report has analyzed and tracked $34 million stolen through scams in the past four years. According to a graph shared by Whale Alert, scams have actually increased as the market becomes more professional and aggressive. In the past, most cryptocurrency scams include malware and extortion emails to an unsuspecting and small number of victims.

“Scams have now evolved into fake enterprises offering round the clock ‘customer support’ with dozens of websites and thousands of fake social media accounts used for promotion,” Whale Alert posted in a Medium blog post.

The growing sophistication of scams have been noted by Whale Alert, but the most prominent type of scam is still the fake Giveaway, where scammers would use a well-known personality to entice users to join a campaign where they would send Bitcoins "in exchange for more Bitcoins." Once the user sends their Bitcoins, the scammers will not fulfill their promise of sending more Bitcoins back. Whale Alert said fake giveaways can earn between a few thousand to $300,000 depending on the skill and effort they put on the fake campaign.

Whale Alert highlighted some of the few successful scams in 2020, including the fake SpaceX live stream that net over $130,000 in one day.

Another crypto scam that appears to be ongoing involves a fake cryptocurrency exchange that offers high sign-up bonuses, high liquidity and cheap trading. The victims would only realize they were scammed once they could not withdraw their earnings. The exchange has been active since January 2020 and changes its websites frequently. So far, the fake exchange’s BTC address has raked in $1.65 million dollars worth Bitcoin.

Whale Alert said it did not include Ponzi schemes in the metrics because they are a billion-dollar industry on their own.

With technology, Whale Alert warned that it would only be a matter of time until scammers start using deepfakes to revolutionize the scam market. Deepfakes is a technology that allows for a person’s face to be superimposed to another person’s in a photo or video.

Whale Alert noted that many victims get introduced to blockchain because of scams.

“This is where the community fails the most: local regulation and enforcement will do little to stop scammers, so the responsibility lies with the community,” it said, adding that established crypto and blockchain companies should stop promotions through free giveaways to stop normalizing the idea of free money.

Exchanges should also be actively educating newcomers of the dangers and prevent them from sending anything to suspected scam addresses, Whale Alert added.