Common Types of Cryptocurrency Related Fraud

Crypto Tracing
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As the value of cryptocurrencies leaped and skyrocketed over the past year or so. A report revealed a corresponding increase in cryptocurrency-related fraud. It predicts that this trend is likely to grow as the prices of cryptocurrencies continue to rise. There is a direct correlation between the price of Bitcoin and the number of bitcoin frauds. True enough, 2020 saw more than 400,000 cryptocurrency-related scams globally, a 40 percent increase from 2019.

The Market Capitalization of Cryptocurrency

The market capitalization of cryptocurrency worldwide was US$1.7 trillion by the end of January. This is which is an increase of 800 percent since January. At present, the market capitalization of the cryptocurrency market is more than $2 trillion. Based on current levels of suspicious activity, researchers have predicted a 75 percent increase in cryptocurrency-related crimes in 2021. 

But What Is The Reason? Cryptocurrency?

The transactions made with cryptocurrency provide a greater amount of freedom and security as compared to regular financial transactions. Making it impossible to keep track of a specific customer’s transactions history. The decentralized nature of transactions makes cryptocurrency-based transactions more convenient. Since there is no middleman “middle person” who eliminates the middle man. which saves on transaction costs such as exchange rates, tax, and other costs.

But, it’s the same circumstances that enable fraudsters to flourish. Because of the challenges dealing with the regulation of cryptocurrency as well as the anonymity provided through decentralization. Criminals can quickly conceal their real identities by using pseudonyms or aliases which allows them to conduct transactions anonymously. Furthermore, without the presence of any transaction records the fraudsters are often difficult to trace.

1. Fake Wallets and Exchanges

The title implies fake wallets and exchanges disguised as legitimate cryptocurrency exchanges. And wallets fool users into believing they’re making legitimate investments and transactions. Some fake wallets also serve as phishing scams when the victims input their account information. Scammers can gain access to the accounts of the victims and take funds from victims’ accounts.

2. Fraudulent ICOs

Fraudulent ICOs are likely to be the most frequent kind of fraud in the cryptocurrency industry. According to a study done by Bloomberg 80 percent of ICOs in 2017 proved to be frauds. However, even if the ICO is legitimate, the odds of coming across “the future Bitcoin” are slim.

Recognizing and Avoiding Cryptocurrency Scams

1. Stay With Trusted, Established Organizations

If something seems too promising and too good to be true, then it likely is. Avoid getting rich quick schemes since they are likely to be Ponzi or multi-level marketing schemes. Make sure to utilize reputable and well-known trade platforms and wallet applications. If you are a beginner to cryptocurrency Start with a well-known cryptocurrency. Protect yourself from cryptocurrency fraud. So in the future, you don’t need Crypto tracing and cryptocurrency fraud recovery.

2. Be on The Lookout For Indicators of Fraud

Before making any investments or divulging any account details. You should be sure to confirm that the website is authentic. As fraudsters can create nearly identical interfaces to legitimate websites. For example, verify whether the site is safe by looking for the picture of a padlock. Or words “Secure” within the address bar. Grammar and spelling mistakes and minor variations in logos compared to legitimate organizations which the websites claim to represent. And exaggerated claims can also be dead advertising.

3. Do Your Research Thoroughly

Always do your research thoroughly before deciding to invest. It is important to be aware of the crypto market as a close-knit group. A quick google search for any particular trading platform application, wallet, or cryptocurrency. Is likely to find reviews or warnings from fellow crypto enthusiasts. And also research for Crypto tracing, cryptocurrency fraud recovery, crypto recovery.  So that if in future you are scammed so you are aware of all situations

In the last year, a North American company was able to secure US$3.9 million. Mareva injunction that froze accounts of a Hongkong-incorporated company. That served as the means to carry out a Bitcoin fraud. This complex global fraud involves people who are from Canada, Uthe SA, UK, Malaysia, Singapore, and Hong Kong. The fraudsters employed fake identities to get users to invest huge quantities of Bitcoin that they didn’t actually possess. 

5. Suffered From Fraud

There’s no reason to be lost if you’ve suffered from fraud. So Crypto tracing is possible. cryptocurrency fraud recovery can also be done. There are legal options that can help you to retrieve your money. In the sections below, a few legal options that could help you to retrieve cryptocurrency assets that were stolen.

6. Dissemination Orders

This is particularly useful in cases of cryptocurrency fraud since fraudsters may cover their tracks. Behind the shield of anonymity offered by the decentralized system. The Order requires the presentation of documents and pertinent details. That may aid in identifying the person who is committing fraud. The Bankers Trust Order (a specific declaration order by the Court against non-parties like cryptocurrency exchanges and banks to aid in the trace of money). Can also be sought to force the disclosure of pertinent information that could aid in tracking your assets. And assist in the recovery of your assets.

7. Freezing Orders

The fraudster is not able to remove his funds from reach. And there will likely be enough funds to cover your loss. Unfortunately, the COVID19 epidemic has indeed expanded the reach of fraudsters. Due to the increasing frequency of technological tools. The availability of this useful and efficient remedy, if used promptly, improves the chance of recovering and can lead to an immediate settlement

8. An HTML0 Leap of Faith

It remains a major issue for regulators as well as investors too, as it’s difficult to regulate the cryptocurrency market without cutting off the essential characteristics that distinguish it from fiat currencies.

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