The rate of Bitcoin scams has risen exponentially in the past few years according to Canadian Police, and they have subsequently warned citizens to be alert of its rise.
Bitcoin Scams Keep Evolving
As authorities continue to decipher ways to deal with different forms of scams and fraudulent cryptocurrency activities, the Canadian police have raised an alarm that the methods engaged by fraudsters continue to evolve.
In the statement that was released by the police department, the authorities revealed that the rate of Bitcoin Scams has doubled just within the space of four years. The statistics showed that cryptocurrency fraud has risen by an astonishing 90 per cent between 2013 and 2017 alone, and even surged up by an extra ten per cent in 2018.
The methods being employed has increased in the same fashion and fraudsters can now select and improvise workarounds that would suit them. Constable Tuyen Nguyen from the Edmonton Police Service (EPS) explained how Bitcoin and cryptocurrencies such as Monero—known for its privacy—have become a welcome respite for fraudsters. For example, the use of gift cards for fraud has decreased according to Nguyen, because scammers feel Bitcoin is safer and more untraceable.
“What has evolved is the method of payment demanded by fraudsters,” he said. “While gift cards were once the preferred payment of choice, fraudsters are now increasingly demanding payment in other forms such as bitcoin and e-transfers.”
Other devices through which scams are also being perpetrated also involve fraudulent Initial Coin Offerings, and fake cryptocurrency exchanges and wallets. Evolving technology has seen the rise of fraudulent bots on Telegram and other social media advertising Ponzi or pyramid schemes. However, one of the significant developments that have been exploited by fraudsters in Edmonton, Canada, is the Bitcoin ATM.
Bitcoin ATMs Now Exploited
According to another police officer in the Edmonton department, Kyle Pepper, the rise of Bitcoin ATMs has also coincided with an increase in scams where fraudsters take advantage of Bitcoin to convert cash to BTC, without being traced.
“It’s a very hard fraud to investigate given that after the money has been transferred,” Pepper said, highlighting the difficulty associated with tracing fiat cash already converted to BTC. He complained: “We can’t freeze the funds that are in the machine because it’s already been converted. It’s unfortunate. There’s been a lot of people that have lost a lot of money.”
Police in Edmonton are presently raising attention and awareness to fraudulent crypto scams in French, English and other languages across the state.