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Has the hitting its highest ever price given birth to a new wave of Bitcoin scams?

The first quarter of 2017 has seen a rapid rise in Bitcoin-related crime.  It is a rise that undoubtedly has much to do with the fact this was the period that saw the cryptocurrency being incorporated within then hitting an all-time high price on the world’s financial markets. 

The same period has also seen the volume of Bitcoin related scams spike.  Just as worryingly, the nature of these scams has increased in sophistication.  While there are still multiple instances of straightforward phishing being reported, there has also been an increase in much more extravagant pyramid-style schemes.  In fact the only common ground is every single scheme was built around the Bitcoin name and logo.

Mercifully the majority of Bitcoin scams are still pretty unsophisticated.  Some try to trick users into using apps designed to filter the victim’s money across to the scammer.  Some simply promise an instant payment of one of the major currencies in return for depositing an opening balance.  The only problem is as each transaction is faceless, nameless and online, it is easy for the scammer to disappear into thin air once the fraudulent transaction is complete.

Similarly the continued growth of social media (and the increasing ease with which a Facebook account can be hacked, replicated and manipulated) makes it easy for the criminals to make their scams look more legitimate and push awareness of their offer further and faster than ever before.

Recent figures released by cyber-security specialists ZeroFox show that during a 3 week period in March reported they had tracked more than 3,600 unique URLs distributed via almost 9,000 social media posts that promoted fraudulent Bitcoin schemes.  Unsurprisingly this peak in new Bitcoin scams has corresponded exactly to the price of a Bitcoin reaching an all-time high on the open market, a hugely attractive landmark for today’s aspiring cybercriminal.

However, as specialist litigation lawyers with a long and successful history of helping clients resolve disputes involving all type of Bitcoin and online fraud, our opinion is there are other factors than just price behind the recent rise in Bitcoin fraud.  

One could well be the birth of the ICO (Initial Coin Offering) which allows entrepreneurs to offer potential investors cryptocurrency as stock in their new business.  Admittedly when the Winklevoss twins initially tried to launch this on March 10th, the SEC denied them permission.  However while this did initially dent the price of a Bitcoin, the price remains at just above £2,000 GBP per coin which is a potential level of return that no aspiring cybercriminal can ignore.

If you have been the victim of a scam involving Bitcoin or any other cryptocurrency or have received an approach via email or social media you think maybe be fraudulent, you need to act quickly.  Please call us on 020 7792 5649 or email info@selachii.co.uk.

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