Rise in Bitcoin Related Scams on Social Media

A new report has found that with the value rise of Bitcoin there has been an increase in the number of scams involving the digital currency on social media and websites.

The report, ‘Bitcoin Scams on Social Media: The Dark Side of Digital Currency,’ found that after the currency’s value exceeded that of gold, instances of online fraud could be found in four categories relating to the currency. These are phishing, flipping, pyramid schemes and malware.

The research, which was undertaken by ZeroFOX, a cybersecurity firm based in Baltimore, Maryland, said:

To date, we’ve identified 3,618 Bitcoin scam URLs. We measured how often posts containing these URLs were shared over a three-week period in early March, and discovered a total of 516 shares averaging 24.53 shares a day.

However, not all Bitcoin scam posts had URLs to known scam websites. Possibly to present a realness to the scams, some asked for direct contact through direct messages or phone while others directed post viewers to a URL containing their bios.

According to the cybersecurity firm, these were more numerous, totaling 8,742 posts for an average of around 416 posts each day over the same time period while scammers are reported to have had unique profiles more than 68 percent of the time.

They said:

If it’s one thing we’ve learned about social network scammers, it’s that they succeed by leeching onto the money-driven hype associated with the latest and greatest hallmarks of popular culture.

With scams involving the digital currency becoming more prevalent, the number of times the scam websites are being shared is increasing. So much so, the ZeroFOX found that the number of Bitcoin scam URLs was shared over 126 million times on social media. It adds, though, that two specific URLs were shared more than 40 million times and two others, which were shared over 10 million times.

And yet, it is down to the fact that Bitcoin is a decentralized, anonymous and irreversible that appears to be making it a profitable currency for scammers, but there are ways in which a person can avoid becoming a victim of Bitcoin scams.

Unfortunately, while the currency will continue to be targeted by criminals intent on targeting the less informed, it’s the same with fiat currency too.

While Bitcoin may be a lucrative currency for thieves to take advantage of, this doesn’t make it any less of a currency to consider as a way of life.

Featured image from Shutterstock.

Canadian Police Warns Public of Bitcoin Fraud Schemes

Canadian police in the municipality of Durham have issued a notice late last week warning the public about new fraudulent schemes involving bitcoin.

According to a notice posted last week, the Durham Regional Police have been receiving a growing number of reports by Durham residents about fraudulent schemes based on bitcoin.

The scam involves fraudsters selling a money-spinning opportunity to victims with transactions involving the purchase and transfer of bitcoins through fraudulent cheques.

An excerpt from the public warning explains:

Residents have reported being contacted by fraudsters after applying for jobs or responding to ads online involving a promise to make money. The fraudsters send cheques to the victims and ask them to use the money to purchase Bitcoins–a virtual currency used globally.

The scam takes shape when victims deposit the cheque or e-transfer the amount into their accounts, prior to buying and depositing bitcoin into the fraudsters’ account. Their incentive is a portion of the money sent to them via the cheque. Inevitably, after victims buy bitcoins with their own money, the fraudulent cheque or e-transfer bounces.

The regional police have not revealed any details or figures as to the number of victims falling prey to the scam. However, these scams have resulted in the loss of “several thousands of dollars” among victims in the Durham region, according to the law enforcement agency.

Bitcoin scams have also reportedly taken shape in revenue agency scams where fraudsters purport to be government employees to ask for income tax payments, although no details have been revealed.

Police are also urging victims who have lost money to such scams to call in. The authority is also reminding residents to discuss the information with “seniors or other vulnerable people” who do not have access to the warning on the internet.

Featured image from Shutterstock.

WWII Veteran Didn’t Want Bitcoins in Alleged £10,000 Pension Scam

An odd courtroom drama played out at the Hastings District Courtroom in New Zealand today. The judge-only trial involved a 95-year-old WW II veteran and a 48-year old American migrant promising returns on investment with bitcoins exchanged from the veteran’s £10,000 RAF pension fund.

As reported by regional publication Stuff, local police alleged that Roy Toler, a 48-year-old American migrant in New Zealand had taken the pension funds belonging to 95-year-old Geoff Bibby, a Lancaster Bombers navigator of the Royal Air Force during World War II, to invest them into bitcoins without the veteran’s knowledge.

The Judge heard that Bibby wanted to transfer his RAF pension fund of £10,000 from the UK to his new adopted home in New Zealand in late 2015. However, traditional banking charges or wire transfer fees put off the veteran who began looking for other solutions.

Bibby was a navigator of the Lancaster bombers (pictured above) during World War II.

An acquaintance introduced Bibby to Toler who, according to Bibby, claimed he could transfer the funds with no fees and that they would credit Bibby’s account within eight working days.

For his part, Toler denied the claim and instead stated that he had told the veteran about bitcoin instead. According to him, Bibby had agreed to invest his pension into the cryptocurrency.

As reported by the publication, Bibby stated in court:

I had absolutely no intention of investing the money. He mentioned something about Bitcoin, but I wasn’t interested. I thought it was a load of codswallop and I couldn’t understand it.

The funds were transferred to an account held by a limited company of which Toler was sole director, in October 2015. There was no written agreement about the transfer of funds. Two months later, all of the money was spent by Toler.

Toler told the Judge that he held USD$45,000 in bitcoins and that he had put a portion of this amount in ‘Bibby’s name’, according to the publication, in exchange for the pension fund.

Toler claimed his bitcoin account was hacked soon after the pension funds had arrived, adding that he hasn’t been able to recover these lost bitcoins since.

Bibby, who did not see the funds credit his account, persevered for a whole year asking Toler about his pension funds, to no avail. Finally, he went to the police.

A short while after, Toler gave Bibby a bank cheque for NZ$22,500.

Judge Bridget Mackintosh reportedly pointed to ‘well-publicised skepticism’ about bitcoin’s integrity, noting that the ‘Bitcoin scheme’, as stated by the publication, seemed very complex.

Toler is charged with obtaining (money) by deception and Judge Mackintosh has made no ruling yet, reserving her decision in court today.

Images from Shutterstock.