Generally, when we see reports of cryptocurrency and blockchain crime, we see reports of either hackers or ICO based scams. I suppose these methods are the most common for stealing crypto assets because ultimately, they are the most covert. Therefore, it is shocking to hear this latest news from the Ukraine, which reports how four men have been arrested for setting up and running six fake cryptocurrency exchanges. This really is a scam on a very elaborate level.
According Bleeping Computer, authorities in Dnipro arrested four men aged between 20 years and 26 years last week after they had been found setting up six fake cryptocurrency exchanges, designed to scam customers. The exchanges existed on the following domains (all of which have now expired);
According to Bleeping Computer there could be many more pages added to this list in coming days:
“Investigators believe the group ran more sites. They are now asking users to file complaints if they’ve been duped by fake exchanges in the past. Officers raided the suspects’ homes during the arrests and seized computers, flash drives, smartphones, and other equipment. Police officers are currently investigating the seized equipment to determine the size of damages incurred to users.”
See the full report by Bleeping Computer for yourself, here-
Could this be the next big crypto scam?
We sure hope not. Being duped by a malicious cryptocurrency exchange is far easier than buying into a scam ICO, therefore, the potential for mass-damage on a large scale is huge. By establishing a fake exchange, hackers have access to personal banking details, private keys, wallets, general personal details and of course, a number of crypto assets. Even more concerning is the fact that, if this scam is left to mature, the hackers would amount millions in legitimate assets before they eventually decide to close the exchange and run away with the profits.
Worldwide, legislation is coming into play to stop this happening, but that legislation is meaningless if innocent people aren’t aware which exchanges are real and which are fake. It is events like this that serve as a true reminder of why cryptocurrency licensing is truly very important.
Whilst it’s a hard scam to come by, everyone trading is at risk. Therefore, remember to ensure your exchange is legitimate, check the URL, ensure the webpage is secured and if you spot anything out of place, report it.