According to blockchain data analysis firm Chainalysis, cryptocurrency crimes are on the rise.
Ponzi models and other forms of fraud related to Bitcoin and cryptocurrencies “sucked” at least $ 4.3 billion from investors in 2019. This number is much larger than the 3 billion level. USD in both 2017 and 2018 combined.
Many inexperienced investors have only heard stories of getting rich from Bitcoin and think they can also become rich.
According to Christopher Janczewski, an employee of the US Taxation Department who specializes in investigating criminal cases involving cryptocurrencies, fraudsters took advantage of that innocence to commit fraud.
Here's an example, Seo Jin-ho, about 40 years old, runs a travel company in South Korea, which is not interested in investment projects with too lucrative profits until a gender colleague Tell him about PlusToken, a Bitcoin trading platform and other cryptocurrencies.
According to Mr. Seo, this colleague visited several times in early 2019 and “whispered” that he could earn 10% per month. Eventually, his skepticism disappeared, and Mr. Seo decided to buy $ 860 of cryptocurrencies on the PlusToken platform.
The money poured in immediately increased rapidly. In less than 5 months, Mr. Seo spent $ 86,000 to buy cryptocurrency, but only withdrew $ 500. Mr. Seo once thought that “sending money in a bank is not worth it”. He attended PlusToken conferences and invited friends to join him.
By June 2019, everything has changed. Chinese authorities conclude that PlusToken is a hoax, and arrest six Chinese nationals believed to be operating the platform outside of the Pacific island nation of Vanuatu.
The platform stopped working after that and people could not withdraw money. Mr. Seo and countless other victims lost access to the account. Meanwhile, authorities in China and Vanuatu declined to comment.
Chainalysis Company also concluded that PlusToken is actually a Ponzi model, that is, borrow money from one person to pay debts to another. The borrower makes a commitment to pay the lender high returns and advertises to them about examples that have previously received high returns to attract lenders.
PlusToken attracted investors primarily in Korea and China in 2018 and the first half of 2019. Chainalysis said PlusToken has earned at least $ 2 billion.
Or another case is Gary Condry, a 70-year-old veteran in Wooster, Ohio, who started texting with a man claiming to be Jason Hanley he found on social media. Hanley uses Instagram and Facebook pages to promote the cryptoinvestments247 investment site and promises to pay weekly.
Mr. Condry gave Hanley $ 200 in November 2019 and another $ 700 in early December. Within a few weeks, he was told the account increased to nearly $ 17,000. However, this is just a trap. Hanley asked for an additional $ 1,700 before paying off “interest” to Condry.
He said this was not part of their deal. After some angry messages, he accepted to give up trying to withdraw interest or even regain his initial investment.
Chainalysis company said that thanks to active marketing activities, about 180,000 Bitcoin, 6.4 million Ether and 110,000 Tether were transferred to PlusToken wallets. Calculating the price at the time investors deposit, the investment has increased by up to 2 billion USD.
Since Bitcoin launched 11 years ago, the cryptocurrency has been very difficult to accept.
At its peak in 2017, the price of Bitcoin reached nearly $ 20,000 and attracted investors who expected Bitcoin to develop global finance and replace the USD.