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Cheated Cryptocurrency Investors Are Taking Matters Into Their Own Hands



Technology & Security

Blockchain transactions are irreversible: that’s one of the strengths of digital currencies such as bitcoin. But when funds are stolen, it means there’s no recourse for getting them back. Hacks and scams are endemic to the cryptocurrency space, and while experienced operators are adept at spotting the more obvious frauds, newcomers aren’t so astute. Some investors, cheated out of their digital assets, have taken it upon themselves to hunt down the culprits.

Also read: Investors Call Foul Play as Coinbase Parries Insider Trading Accusations

Who You Gonna Call?

Theft, in whatever form it takes, is a crime that falls under the jurisdiction of the police. In reality, reporting cyber crimes, especially those pertaining to cryptocurrency, is often a futile exercise. Low level officers typically have little to no knowledge of how cryptocurrencies work, while specialist cyber units have bigger fish to fry. Chasing down a handful of lost ether from a scammy ICO is the least of their concerns.

While some thefts, such as wallet hacks, are immediately apparent, others take longer to become manifest. This is particularly true in the case of fraudulent ICOs and scamcoins. Before the sicking reality kicks in, there’s a period of unease, during which the investor fears the worst but is praying to be proven wrong. Scores of such scams have unfolded this year, including Confido, which made off with around $375k in crowdsale funds.

Cheated Cryptocurrency Investors Are Taking Matters Into Their Own Hands

At the time, defrauded investors made the usual threats to track down the projects’s supposed CEO, but little came of these promises. It takes an extremely enterprising individual to step away from social media and proactively do something about the matter. The number of victims with the determination – or desperation – to try and recoup their losses is few. Nevertheless, a handful of defrauded groups have sought to do just that.

Going for Gold

One group of individuals lost funds via a fake wallet which was listed on the bitcoin gold website last month. The scam netted its perpetrators a total of $3.3 million. In search of a solution, one victim posted to a popular freelancing job site seeking “an expert in blockchain and cryptocurrencies analysis and chain tracking”. They explained:

We are a group of people whose cryptocurrencies were stolen through a scam online wallet promoted by the official bitcoin gold website. We want to reach the thief to get our money back. We have a foundation and we can proof ownership of stolen funds.

It’s safe to assume they were unsuccessful in that endeavor. Had the group succeeded in tracking down the thief, the chances of the funds being returned to their rightful owners are slim to non-existent.

This week, the same freelancing site saw another ad posted from an individual trying to track down an alleged ICO scammer. Ethconnect is a platform modeled on Bitconnect – an amorphous cryptocurrency lending platform that has been labeled a Ponzi scheme. Ethconnect appears to operate in the same manner, including such dubious claims as “After the ICO you can sell for instant profit”. The pinnacle of the Ethconnect roadmap seems to be getting listed on Coinmarketcap.

Cheated Cryptocurrency Investors Are Taking Matters Into Their Own Hands

Having finally deduced that Ethconnect might not be all it was cracked up to be, the job listing requested that a Tokyo-based individual visit the company’s premises. The listing, written in broken English, explains:

“We need you physical go to the address to verify exist of the company. We are international investor who invest ethconnect ICO…Based on their roadmap, they suppose to deliver to certain state. But as at this moment their official telegram keep update a lot of excuse to push origin schedule. Furthermore, their support email, fb messenger, fb page, twitter never reply at all. We seems been cheated, just want to double confirm. instead of waiting a hope endless.”

Some may argue that it is heartening to see investors taking matters into their own hands, rather than lazily rattling off tweets at the SEC begging for intervention, as was the case in the wake of this week’s Coinbase fiasco. Then again, had the same groups exercised the same diligence at the buying stage, they wouldn’t be in this predicament.

With law enforcement unwilling or unable to assist with minor cases, it wouldn’t be surprising to see self-styled ICO detectives springing up: entrepreneurs willing to track down scammers in exchange for a share of the spoils. Anyone can play the role of internet sleuth. Successfully recovering stolen cryptocurrency, however, is a different matter entirely.

Do you have any sympathy for investors who buy into scammy ICOs? Let us know in the comments section below.


Images courtesy of Shutterstock.


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Source: news.bitcoin.com

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