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Two new but very different cryptocurrency frauds hit the headlines

Over the weekend reports surfaced of accusations of fraud being made by Bitcoin Private (BTCP) developers against cryptocurrency exchange HitBTC .

Their allegations were outlined in a letter that was published on the Bitcoin Private Twitter profile on 9th March. The letter claims HitBTC attempted to “extort” BTCP following unresolved complications arising from a planned coinburn (the deletion or “burn” of any coins that hadn’t been claimed). On the 3rd March, 2018 - the day after their launch - HitBTC seemingly tried to charge the BTCP team a listing fee of half a million dollars in Bitcoin.

Screenshots that have been made available show deleted tweets from mid-February in which HitBTC assure users they won’t be affected by the burn. However, on 15th February - the day before the coinburn was planned for - HitBTC emailed BTCP to ask for help in protecting their users’ funds, a request that quickly turned into a request for compensation of 58,920 BTCP to cover the losses they were now predicting.

The BTCP developers have argued that the exchange could not have been genuinely concerned about these potential losses as it was a situation that simply didn’t exist. They have also alleged that on the 21st February (the day after the burn did happen) HitBTC allegedly threatened to stop any support for BTCP if the development team did not provide the 58,920 BTCP in compensation they’d asked for.

In an official statement HitBTC said the BTCP team was unable to provide a safe way to move the funds before the burn but that they had “compensated all the custody losses”.

The picture is muddied further by reports last December that allege 2.04 million units of Bitcoin Private were apparently coined in secret, a report the developers have admitted are “mathematically accurate” but as yet the reasons for producing so much additional BTCP is not clear.

Meanwhile in Sweden Instagram users have been tricked by a more traditionally structured scam.

They have tried to purchase a range of branded goods including high fashion products and consumer electronics at knockdown prices only to find out as the transaction concludes that they’ll need to exchange their Euros for cryptocurrency.

The only problem is once that exchange is completed, the seller disappears with the money and the goods are never delivered.

The victims of this scam tend to be younger than crypto fraudsters’ traditional targets. They are tempted by brand new Instagram accounts offering Gucci, Louis Vuitton and Apple products at low prices. As the accounts have sizeable followings, they seem legitimate but after a few direct messages have been exchanged, the customer is told that because of the international aspect of the trade the payment needs to be made in cryptocurrency that than in local currency.

Aside from always recommending caution when you see something for sale at a price that’s well below what you’d except, we’d also suggest that if you are asked to complete a transaction in cryptocurrency or via an e-commerce platform you’ve never heard of, you should insist you use a credit card instead. Depending on your credit card provider, your transaction will be protected which makes it much easier to reclaim the costs should the goods you’ve bought never materialise.

These two reports are just the most recent reminders of how susceptible to fraud cryptocurrency remains. If you have been a victim of cryptocurrency fraud or any other type of digital fraud and want to find out what you can do to get back the money you’ve lost, please call us today on 020 7792 5649 or email us at info@selachii.com

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MLA 2017 18 Shortlisted 2