Blockchain Technology Improves – But So Does The Art Of The Criminal Scam

Crime, News | August 24, 2018 By:

As the blockchain and cryptocurrency industries grow and become more elaborate, so, too, are criminal activities getting far smarter.

Earlier this month, we saw a prominent entrepreneur lose three million tokens, allegedly because a lower-level phone store clerk conspired with a criminal organization to pass along sensitive information related to the phone number of the account holder and his SIM card.

That’s one example, But there are others, some so clever you would applaud their ingenuity, if not for the fact that they’re stealing from you.

One such scam involved a QR generator found online at btcfrog.com/qr. The site purportedly allowed users access to a useful tool – but entering a bitcoin wallet address into a QR generator, you received an image encoded with your wallet address.

The problem here was that the wallet address entered  in the QR image was not the user, but belonged to a scammer. Thus, any sort of transaction would be sending money to the thief, not to the intended project manager. The transaction history for that address shows 0.61 BTC garnered in 64 transactions, or $4,021 in USD.  The blockchain history indicates the scam has been going on for two months.

Another clever ploy was recently discovered by one unlucky consumer. Using a mobile device voice command, they tried to summon the customer service number for Coinbase, the large US exchange. They were provided a “click to call” listing for Coinbase Customer Service with a green phone icon, which was pressed to be connected.

Instead of Coinbase, they were routed to a boiler room operation, which then went ahead to “verify” the account with customer-provided information. It resulted in the loss of 1.5 bitcoin.

In both cases, customer service could not do more than commiserate with the unlucky hodlers, who truly were scammed out of their earnings. Both were tech savvy, experienced with cryptocurrency – and, ultimately, victims of thieves who devised a clever ruse.

Have a story to tell on cyber scams?  Send a note to bruce@blocktribune.com.