When is all this cryptocurrency-based fraud going to finally come to an end? It seems like this is becoming an everyday occurrence, and right when one case is over and done with, another one steps in to take its place.
Problems Are Occurring Everywhere
This time around, the fraud appears to have occurred through a Polish cryptocurrency exchange, which has seemingly shut down overnight and taken all its users’ funds with it. The exchange owners are also inaccessible and appear to have vanished into thin air. One user reports the president of the company ultimately opened a business in the neighboring region of Estonia within 24 hours after the closure.
It has also been stated that the company was being investigated by the Polish economic authority, KNF, and “survived” for a few months before being entered into the KNF’s infamous “black list.” In other words, this was allegedly a fraudulent business from the start and quick action wasn’t taken.
In a recent interview, one user comments that the money is gone, and probably won’t be recovered:
There are some very interesting indicators that the cryptocurrencies were taken out and moved to other exchanges a few days before the shutdown. On the blockchain, nothing disappears.
The situation has every sign that an exit scam occurred, and customers are looking to get to the bottom of what happened.
This is terrible, not just for the people involved who lost their money, but for the entire industry. Over the past several years, cryptocurrency and blockchain both have worked hard to establish themselves as legitimate forms of financial technology, and while they have succeeded in several ways, moves like this tend to set them back several steps.
In addition, fraudulent activity is becoming all too common in the crypto arena. We are constantly hearing tales of SIM-swapping and people potentially losing their funds overnight to hackers who have somehow gotten access to their login credentials through their phones. This can either be done through identity theft – in which hackers gain control of a person’s social security number or security answer questions – or through bribing individuals that work for the person’s phone provider.
Fraud Occurs in Many Forms
In addition, initial coin offerings (ICOs) have ultimately been banned by countries like China or are looked down upon as a funding mechanism due to the long trail of fraud often associated with them. ICOs work when a startup or new enterprise seeks to gain funding from investors by asking for money in exchange for a new digital coin that will give the investors access to their goods and services.
Many of the companies that have held ICOs ultimately disappear in short time, or cut out with the money they earn, leaving their investors with empty pockets, bruised egos and worthless coins.