2019 has been the year of the scammers. The latest 2019 Cryptocurrency Anti-Money Laundering (AML) report reveals that the first six months of the year itself has seen $4.26 billion lost to thefts, scams, and Ponzi schemes. $1.2 billion has been lost to crypto thefts in the first three months itself and the number has been on the rise.
What’s more concerning is the fact that despite enhanced security measures and spreading awareness, the scammers and hackers still manage to get around to stealing and fooling people. This is proof that with time the culprits continue to innovate and outpace the system.
The scammers have evolved to a whole new level and the scams are even harder to perceive. Last month it was reported that crypto scammers have penetrated the popular online dating app Tinder, and have been defrauding people pretending to be Asian girls who are interested in cryptocurrencies. While it sounds too obvious and easy to doge, but in reality, it isn’t. Reports reveal that since September, two people have already claimed to have lost a combined amount of $60k with many others reporting to have lost a few thousand.
Most of the scammers get away with these fraudulent activities, but some get caught. Very recently, three men have been arrested in connection to an alleged $722 million crypto Ponzi scheme. The Justice Department on December 10th announced that three men that lured investors into investing in fake bitcoin mining pools have been arrested.
Matthew Brent Goettsche, 37, Jobadiah Sinclair Weeks, 38, and Joseph Frank Abel, 49, were arrested Tuesday.
The suspects have been running a company named The BitClub Network since 2014, where victims have invested money thinking they were purchasing shares in crypto mining pools. The victims were led to believe that they would be earning from bitcoin mining. The shares were never registered with the SEC.
Communication records among the accused have also been discovered where the accused are seen describing the investors as “dumb” and “sheep.” In September 2017, Goettsche sent an email to a co-conspirator in which he suggested BitClub Network would allow him to “retire RAF!!! (rich as f*ck),” prosecutors said.
Goettsche and Weeks are charged with conspiracy to commit wire fraud, while all three men are facing charges of conspiracy to sell unregistered securities. According to their lawyers, the three are expected to appear in court on Tuesday.
The crypto industry has been plagued by these illicit activities and it is one of the major reasons that crypto isn’t being adopted for day-to-day use. The anonymous and untraceable nature of cryptocurrencies that is on of the strengths of this industry has slowly turned out to be a curse. The question still remains, is the technology to be blamed?