Categories: News

$38m in BTC Stolen by Scammers Over 4 Years: Whale Alert

Scammers have stolen $38m in bitcoin over the past four years, according to crypto watchdog Whale Alert. Actually, $24m of this figure was looted only in the first half of 2020.

In a report, Whale Alert said it has collected and analysed data from websites using its blockchain crime tracking tool, Scam Alert, over the past two weeks.

The $38m scam did not even include Ponzi schemes, the report added.

“Some of the most successful scams made over $130,000 in a single day. They just used a one-page website, a bitcoin address, and a decent amount of YouTube advertising,” the report continued.

Another scam managed to “rake in over $1.5m over 6 months (and is still going strong). It promoted a fake exchange with an amateurish website riddled with spelling errors,” the report added.

It noted, “the scam market is characterized by high profits, no taxes, minimal effort, and zero risk.”

Moreover, Whale Alert projected that by the end of 2020, the BTC scam market will make at least $50m annual revenue.

“Established blockchain companies play a big role in normalising the idea of free money through giveaways. They should be more thoughtful about what message they carry outwards and stop with these kinds of promotions altogether,” Whale Alert said.

“There are dozens of different types of scams, such as giveaways, sextortion, fake exchanges, fake ICO’s, bitcoin recovery, video scams, Ponzi schemes, and fake tumblers,” it added.

After visiting hundreds of websites and collecting data for thousands of BTC addresses, Whale Alert concluded, “Crypto crime pays. A lot.”

Most profitable scam types

The Whale Alert’s report found that “the most prominent type of scam at the moment is the Giveaway. It features either a celebrity like Elon Musk or a well-known exchange. It can net between a few thousand and $300,000 depending on the skill and effort put in by the scammers.

Meanwhile, based on the change in method and the increase in quality and scale, “the entire professional teams are now behind some of the most successful ones. It is just a matter of time before they start using deepfakes,” Whale Alert said.

The watchdog warned that such technique (deepfakes), will “surely revolutionise the scam market.”

“The origins and destination of scam proceed to some of the top exchanges, gambling sites, and payment providers. These either willingly or, more likely, unknowingly participate in these crimes,” the report added.

Whale Alert tracks millions of transactions made everyday using blockchain technology. It converts transactions into a single standard format and stores them in its databases, according to its website.

What is the deepfakes?

Deepfakes is a term combining the phrase “deep learning” and the word “fake”.

Emerged in 2017, the technology uses AI and free apps to create images, videos, and even audios of fake events.

Deeptrace, a visual threat intelligence company, warned that the deepfake phenomenon “is growing rapidly online.”

In a 2019 report, it said deepfake videos almost doubled to 14,678 over seven months.

In a similar context, Facebook in June set a policy of banning deepfakes and other manipulated videos from its platform. The step aimed to combat misinformation ahead of the United States presidential election.

Fatma Lotfi

Egyptian bilingual journalist with six years of experience, focusing on various beats, including tech, cryptocurrencies, and finance.

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