Over the past year and a half, Bitcoin and its companions in the crypto market have been a hot topic around the world. Bitcoin aka The King’s Coin Hit an All-Time High of Nearly $69,000 and Market Cap to hit a peak of $3 trillion. The phenomenal growth in its price and innovation has made people keenly interested in the movements of the market in the world.
Interestingly, this was the first time the cryptocurrency managed to grab everyone’s attention. The same thing happened in 2017, when the coin hit a high near $20,000, a moment that seems to have happened yesterday for many active participants in the crypto space.
What sets this bullfight apart from the last is the innovation that has come with the price tag. The past year has seen blockchain technology disrupt several industries, with the main impact on the art sector with the emergence of NFTs. This emergence has pushed several notable artists, celebrities and athletes into the space.
All the hype and noise created due to notable participants and massive price movements has, in turn, seen more and more people dipping their toes into this emerging digital space. While the growth in adoption is a positive sign for the future of cryptocurrencies, rising prices have also led to an increase in scams.
The resurgence of scammers
Crypto scams have caused hundreds of investors to lose a significant amount of money, with 2021 recording a total of $14 billion Fly in crypto by scammers. Now, the presence of scammers taking advantage of gullible investors is not a new story in the crypto space. It’s been a factor for years.
In 2017, the most well-known way to scam investors was to entice them with “gift” offers. This strategy has seen scammers impersonating a notable figure and announcing a crypto giveaway, with participation rules requiring investors to deposit a certain amount of crypto to a wallet address. Once deposited, they left with the money. This was followed by Sim swaps and other methods to steal someone’s crypto.
While this method still exists, its effectiveness over the years has drastically diminished over the years due to constant attention from influencers and the media. However, time led to a change of plans. These days, scammers have been reported to use various methods to trick naive users.
The new game plan
Over the past year, the cryptocurrency space has seen various methods deployed by scammers to scam investors. This understand romance scams, investment scams, chargeback scams, fake receipt scams, Phishing scams, QR code scams, among others.
In India, a combination of new and old methods has been making waves among novice investors. These crooks, reported to operate internationally with its websites having a local presence, use fake news, websites and top celebrities and crypto companies to get rid of investors.
The most high-profile celebrity used by infamous actors is Bollywood celebrity – Amitabh Bachchan aka Big B – who is often aired to promote “a new cryptocurrency auto-trading program called Bitcoin Loophole” in a fake interview. Notably, while the Big B advertisement itself is fake, scammers post genuine “Bitcoin Loophole” information on some mainstream news portals as an advertisement.
Once the scammers get their hands on the user base via this scam, they are asked if they have a Binance account and if not, they are asked to create one. If asked about the need for one, they are told that trading fees are typically 2x on other platforms compared to Binance. After that, users are advised to buy USDT – the best stablecoin – and transfer it to a platform fully controlled by them.
The Binance approach
Rising crypto prices have led to the rise of companies supporting the crypto market like Binance – a provider of cryptocurrency and blockchain technology infrastructure. The exchange has seen phenomenal growth over the past few years, thanks to its user-centric policy and quick action in integrating all the products required by its user base.
The popularity of the exchange has grown to such an extent that it recordings more than $150 billion in transactions per day. The massive volume of the exchange has made it a hub for traders and investors looking for good liquidity and a safe platform. And, while the exchange is sought after by good actors, it has also been used by bad actors, like the ones reported above.
Nonetheless, the exchange has been at the forefront of recognizing these players and reporting the activities to the relevant regulatory authorities. Just last year, the swap was part of a crackdown on two very prominent bad actors. The first one implied nested exchanges and the second implied ransomware attackers liable for damages worth approximately $500 million.
Notably, Binance has identified the nefarious actors present on its platform by deploying a two-pronged approach. First, its detection system identified and eliminated suspicious accounts and second, it worked with law enforcement to bring down criminal groups. Additionally, the exchange notified its users if they were detected to have a connection to nested exchanges.
In both cases, the exchange has collaborated with certain regulatory authorities, including the Cyber Police of Ukraine, the Cyber Bureau of the Korean National Police Agency, the Swiss Federal Office of Police and the American law enforcement. The exchange has also started implementing one of the best AML/KYC policies aimed at curbing such activities.
In the case of Binance being used by scammers in India, a spokesperson noted in a report,
“We track certain systems when we detect or trace illicit activity. We also try to fight criminals using an internal system.
Getting a head start in the game, the exchange has partnered with TRM Labs, a leading crypto compliance and risk management company, while implementing its blockchain analyzer on its platform. In addition to TRM Labs, the crypto service provider has also partnered with Crystal, a blockchain analytics company.
Additionally, the exchange acknowledged that while crypto crooks cannot be controlled, its entry and exit points could be closed. As such, Binance performs regular audit checks, which include risk scoring and fund flow analysis.
Disclaimer: This is a paid publication and should not be viewed as news/advice