Crypto Fraud is Growing Exponentially

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Crypto Fraud is Growing Exponentially (yahoo.com)






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EditorDavid

from the borrowed-apes dept.

The Los Angeles Times reports on “a massive surge of criminal fraud that has been pummeling crypto users with unknown billions of dollars in losses with little relief in sight.”
The growth in crypto fraud has turned exponential in recent years. The reported losses from crypto scams in 2021 were 60 times larger than in 2018, the Federal Trade Commission reported earlier this month, with crypto now accounting for 1 out of every 4 dollars lost to fraud in the reports monitored by the agency. Over 46,000 people lost more than $1 billion in crypto to scams since 2021, but the real sum of losses is likely vastly larger because most frauds are not reported, the agency said…. “Since 2021, $575 million of all crypto fraud losses reported to the FTC were about bogus investment opportunities, far more than any other fraud type,” the agency reported.

Financial losses specifically from NFT crimes just through May this year were already more than 600% higher than for all of 2021, with the space seeing twice as many hacks and bigger and bigger heists, according to analysis from digital privacy firm Top10VPN.

For many victims, there’s little hope of getting their lost art back. The marketplaces where NFTs get sold — crypto exchanges — can’t cancel or reverse fraudulent transactions the way a traditional bank or credit card company might; the whole point of crypto was to cut out these sorts of financial middlemen, which many crypto fans greatly distrust. Crypto technology was built out of a “libertarian ethos” in which “there’s no nanny state that’s going to take care of you,” said Jeremy Goldman, an intellectual property attorney who specializes in legal issues involving crypto assets. “These are the consequences when there’s a mistake … there’s no one to unwind it, you can’t call customer service, you can’t go back to the mothership, you can’t go back to the bank.”

But at the same time, law enforcement agencies in the U.S. have also shown a growing willingness and ability to mount sophisticated investigations into crypto fraud…. [I]n March, federal agents sought a court order to seize roughly $165,000 worth of Ethereum in a digital Binance.US wallet. Officials said the cryptocurrency had been stolen from an Orange County investor, nicknamed “P.M.,” who got tricked into giving up his coins by an fraudster pretending to be a Coinbase technical support representative.



On the bright side, BuzzFeed notes that actor Seth Green has recovered his prized Bored Ape NFT from “Mr Cheese” for $297,000 worth of Ether.

But the Los Angeles Times points out that another victim of a Bored Ape heist has sued the creators of Bored Apes. Their lawyer argues the company “refuses to police their own community. They’re the gatekeepers, they can lock out the thieves if they wanted to, and they won’t do it.”

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EditorDavid