HomeSecurity & RansomwareResearch Paper: Crypto Scams Are Too Common

Research Paper: Crypto Scams Are Too Common


It looks like crypto scams are far more prominent than we originally thought, according to a new research paper.

Crypto Scams Are Pretty Common

Analysts at the University of Technology in Sydney and the Stockholm School of Economics have announced that crypto scams are taking place everywhere and all the time. We just need to know where to look. Ultimately, these scams are accumulating millions of dollars in dirty money virtually every month, and not enough is being done to keep people safe.

The cryptocurrency industry is wrought with illegal behavior. While it’s easy to simply dismiss this as a rumor and accept crypto as a perfect financial space, this would be inaccurate considering some of the high profile cases that have come to light in just the last few weeks alone, the biggest one being a Twitter BTC hack that saw more than $121,000 in BTC stolen overnight.

While this may not seem like a huge number, it’s how the scam operated that’s really got people talking. First off, several high-ranking accounts – including those of former president Barack Obama, his vice president Joe Biden, SpaceX and Tesla CEO Elon Musk and Microsoft exec Bill Gates – all saw their Twitter accounts hijacked by a 17-year-old named Graham Clark. Messages were put out for their followers, telling them to send their BTC to anonymous addresses so that their funds could be doubled.

Sadly, the funds were not increased and were just taken by the scammer, who after being arrested, was charged with computer fraud and several other crimes.

But this is just one example. In just the last seven months alone, for example, the researchers who published the paper say they’ve discovered over 350 incidents of crypto price manipulation occurring via digital exchanges and trading platforms. Overall, as much as $350 million in crypto was linked to suspicious or illicit trading activities such as “pump and dump” schemes.

One of the authors of the paper – Anirudh Dhawan – explained in an interview:

If you compare the scale of manipulation to traditional equity markets, it’s exponentially higher. Even in the penny stocks, OTC equity markets, you’ve got a few hundred cases in a ten-year period. Here, you’ve got more than 300 cases in the space of a few months.

Pump and dumps are particularly dangerous in that they allow scammers to inflate the price of an asset – whether it be a stock or a cryptocurrency – and convince others to invest. This causes the price of the asset in question to surge even more. The scammer than sells their shares at a massive profit before the asset falls heavily.

What Makes These Cases So Different?

In the paper, the researchers write:

Manipulators make no pretense of having private information or claiming that a coin is undervalued, unlike typical stock market manipulations.


Nick Marinoff
Nick Marinoff
Nick Marinoff is currently a lead news writer and editor for Money & Tech, a San Francisco-based broadcasting station that reports on all things digital currency-related. He has also written for a number of other online and print publications including Black Impact Magazine, EKT Interactive, Seal Beach USA and, to name a few. He has recently published his first e-book "Take a 'Loan' Off Your Shoulders: 14 Simple Tricks for Graduating Debt Free" now available on Amazon. He is excited about the potential digital currency offers, particularly its ability to finance unbanked populations and bring nations together financially.

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