According to the US Federal Trade Commission, the average amount US consumers report lost in cases related to cryptocurrency fraud is $1,900 (€1,767). Altogether, blockchain data platform Chainalysis estimates that money was stolen using digital currencies. $14,000 million worldwide in 2021. There are no exact calculations in Spain, but some experts confirm that between 250,000 and 400,000 people are victims of these scams with the hook to make astronomical profits. These are some of the details of this operation used by all-aged scammers, through ponzi schemes, identity theft or ‘phishing’ (a technique of obtaining confidential information from deceptive messages masquerading as legitimate companies). known to regulators.
It is not surprising that the number of cybercrimes committed with cryptocurrencies is increasing every year. “You mustn’t forget that The use of cryptocurrencies has increased by 1,000% in recent years”, says Leif Ferreira, co-founder and CEO of Bit2Me cryptocurrency exchange platform registered with the Bank of Spain. As we mentioned, it is estimated to have more than 350 million users worldwide, although there is no specific data. The IMF emphasizes that the cryptocurrency market capitalization has reached $2.5 trillion, of which 60,000 million euros moves in Spain. There are media cases of FTX (with 8,000 million gaps) and Genesis (with over 3,500 million debt accumulating) among the $14,000 million being swamped in fake cryptocurrencies around the world in 2021, but you can also find: cases in Spain, such as those perpetrated by the ill-fated Javier Biosca (opened a gap of 800 million) or Arbistar, Kuailian or Mind Capital platforms. They acknowledge that “a significant increase has been observed in recent years” from the Civil Guard’s Criminal Cyber-Intelligence Group, but refuse to move forward if they investigate specific companies.
According to various companies in the industry, the first step in deception is to offer fake collateral to the investor by airing the registration of the platform with the Bank of Spain. But, this registration guarantees almost nothing to the investor. Sources from the Bank of Spain explain that registered companies “only demonstrate that they have an adequate structure to comply with anti-money laundering law, but this does not mean that they are audited by the body.” The same sources confirm that the Bank of Spain is aware that these companies “assume” that these companies appear in the document without indicating to their clients that this is not a validation of their services.
traditional methods renewed
Technology has allowed scammers to modernize the old ways. Civil Guard, “techniques social engineering mixed with technical engineering (cheating)for example, through the development of fake web platforms to track investments”. “The scams that occur in cryptocurrencies are not that different from what happens in other types of currencies,” Ferreira says. “As long as there is a computer connected to the blockchain network, a cryptocurrency transaction can already be done,” says Herminio Fernández, CEO of Eurocoinpay.
Fraud is one of the most used by scammers and also one of the most harmful due to its high reach. ponzi scheme. This method promises a high return on investment, but in reality, victims receive their first income with money from other people who have already fallen into the scam. Once the victim network is large enough, supporters of the scam disappear, such as the so-called “crypto queen” Ruzha Ignatova, who scammed a total of $5,000 million from more than three million people with the fake cryptocurrency OneCoin. Ferreira explains that this scam uses social networks as well as YouTube comments on videos that talk about finances to lure victims. “They may also be offered as fake sweepstakes or contests, or through social media profiles that appear to be distant relatives, or online stores that turn out to be fake,” he adds.
Phishing or impersonating trusted companies via emails or phone calls to obtain personal information is also one of the most common methods in the world of cryptocurrencies. “Scams often happen over the phone. They act like financial experts and encourage you to deposit increasingly smaller amounts,” explains Eurocoinpay co-founder. A virus infects users’ devices by clicking on fake text messages, thereby obtaining important information and personal data from the victim. Some ‘commerce’ platforms, such as Bit2Me, have “a system of five overlapping security levels” to avoid such problems for users.
Ignorance about the cryptocurrency market
Related news
If we go back to the origins of the massive cryptocurrency scam, we’ll see that the year coincided with the ‘explosion’ of digital currencies: 2018. There were still very few people who invested some of their money in this financial product, which is little known to most. . countries. Cryptocurrencies managed to spread slowly thanks to word of mouth from these early investors who were accumulating stunning and easy profits. The information also reached scammers, who in many cases saw a niche market for untraceable money. what kind of a The ‘call effect’ of unregistered entitiesor financial pauses around cryptocurrencies. Since 2018, the National Securities Market Commission (CNMV) has increased the number of warnings about financial barriers in Spain by eight, most of them related to a business limited to digital currencies.
Regulations regarding cryptocurrencies accelerating in many parts of the world. While the White House put forward its intention to finalize a law that could prevent risks from digital assets in January, the European Union will implement the Crypto Active Market Regulation (MiCA), a controversial regulation, in a few months. in September 2020. In Spain, the CNMV occasionally reminds us of the lack of control over digital assets. “Utility tokens”, “stablecoins” and NFTs have no value,” said regulatory head Rodrigo Buenaventura a week ago.