Safeguarding Against Crypto Scams Around The Globe & How We Can Use Technology to Recover Stolen Cryptocurrency

Category: Crypto Scams
Length: 24 Pages
Reading Time: 45 Mins

Excerpt: A cryptocurrency, also known as a cryptocurrency, crypto, or coin, is a form of digital currency that is designed to function as a medium of exchange through the use of a computer network. It is not dependent on any central authority, such as a government or bank, to uphold or maintain it. Cryptocurrency, unlike traditional currencies such as paper money, does not exist in a physical form and is not normally issued by a centralized body. In contrast to a digital currency issued by a central bank, cryptocurrencies are almost always controlled in a decentralized manner.

June 13, 2022

Introduction

You will be surprised to learn that as of the year 2021, the average global ownership rate of cryptocurrencies stood at 3.9 percent, and there were over 300 million users of cryptocurrencies all over the world. 

Additionally, more than 18,000 establishments have already begun to welcome cryptocurrency payments. Additionally, in 2021, con artists from all over the world were able to steal a record $14 billion worth of cryptocurrencies, thanks, in large part, to the proliferation of DeFi. Losses incurred as a result of crypto-related criminal activity increased by 79% from 2020. The amount of cryptocurrency that was stolen jumped by 5.16 percent from the previous year, reaching $3.2 billion in value. Seventy-two percent of these stolen funds were obtained through the use of defrauding methods.

Jan Lansky defines a cryptocurrency as any digital asset or system that satisfies the following six conditions: 

  • The state of the system can be maintained without the need for a centralized authority, thanks to the use of distributed consensus.
  • The system maintains a record of all bitcoin units as well as the ownership of those units.
  • The system determines whether or not fresh units of the coin can be created. If new units of cryptocurrency are able to be formed, the system will describe the circumstances surrounding their birth and the method by which ownership of these new units will be ascertained.
  • Proof of ownership of cryptocurrency units can be demonstrated only through the use of cryptography.
  • Transactions that include a change in ownership of the cryptographic units can be carried out using the system without any problems. Only an entity that can provide evidence of its present ownership of these units can make a transaction statement.
  • In the event that two distinct instructions for transferring ownership of the same cryptographic units are entered at the same time, the system will only carry out one of those instructions.

Alan Feuer of The New York Times reportedly found that libertarians and anarchists were drawn to the conceptual premise that underpins Bitcoin. Roger Ver, an early proponent of Bitcoin, stated: “At first, the majority of people who participated did so because of their philosophical convictions. We thought Bitcoin was a fantastic concept. A means to free money from the control of the state.” According to the economist Paul Krugman, cryptocurrencies such as Bitcoin are “something of a cult” that are founded on “paranoid delusions” of the power that the government holds. 

Nigel Dodd contends, in his article titled “The social life of Bitcoin,” that the fundamental goal of the Bitcoin ideology is to liberate monetary transactions from the shackles of both social and governmental authority. Dodd provides commentary on the “A message of crypto-anarchism with the phrases “Bitcoin is intrinsically anti-establishment, anti-system, and anti-state,” which was published under the title “Declaration of Bitcoin’s Independence.” Because Bitcoin is based on essentially humanitarian principles, it weakens governments and causes disruption in institutions.”

According to David Golumbia, the concepts that influence Bitcoin enthusiasts originate from right-wing extremist movements such as the Liberty Lobby and the John Birch Society and their rhetoric against central banks or, more recently, Ron Paul and libertarianism in the spirit of the Tea Party. Bitcoin investor Steve Bannon, who has a “good interest” in the cryptocurrency, views it as a sort of disruptive populism that can wrest control away from centralized government.

The creator of Bitcoin, Satoshi Nakamoto, has expressed his agreement with the notion that libertarianism and cryptocurrencies are complementary ideologies, stating, “It’s highly enticing to the libertarian worldview if we can explain it effectively.” Nakamoto stated in 2008. According to the European Central Bank, the decentralization of money that is offered by Bitcoin has its theoretical roots in the Austrian school of economics, specifically with Friedrich von Hayek in his book Denationalization of Money: The Argument Refined. In this book, Hayek advocates a completely free market in the production, distribution, and management of money in order to end the monopoly of central banks.

In March of 2018, the Merriam-Webster Dictionary expanded its coverage to include the term cryptocurrency. To learn more about cryptocurrency, the trends and regulations surrounding it, the increase in crypto scams, and how you can recover from them, read this article!

7-10% of the U.S. population are victims of Online Scam each year, and 21% of those experience multiple incidents of Internet Scam/Fraud.

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If you’re someone who wants to protect your financial data, then you’re definitely at the right place. We can give you the best practices in identifying red flags as well as help you in recovering your stolen money from scammers!

Table of Contents

CHAPTER 1: What is All The Hype Surrounding Cryptocurrency?

Adrenaline Coin

A cryptocurrency, also known as a crypto-currency, crypto, or coin, is a form of digital currency that is designed to function as a medium of exchange through the use of a computer network. It is not dependent on any central authority, such as a government or bank, to uphold or maintain it.

A digital ledger is a computer database that uses strong cryptography to secure transaction records, control the creation of additional coins, and to verify the transfer of coin ownership. Individual coin ownership records are stored in the digital ledger. This allows for the verification of the transfer of coin ownership. Despite the fact that they are called cryptocurrencies, this term is not used to refer to these digital tokens in the same way that it is used to refer to traditional currencies. Cryptocurrencies have been subjected to a variety of classifications, including that of commodities, securities, and currencies; however, in actuality, they are considered to be their own unique asset class. 

Validators are utilized by certain cryptographic systems to ensure the integrity of the coin. In a scheme known as proof-of-stake, owners are required to pledge their tokens as collateral. In exchange, they are granted control over the token in direct proportion to the value of the stakes they have placed. In most cases, the token stakers receive increased ownership of the token over the course of time as a result of network fees, newly issued tokens, or other compensation systems of a similar nature.

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Cryptocurrency, unlike traditional currencies such as paper money, does not exist in a physical form and is not normally issued by a centralized body. In contrast to a digital currency issued by a central bank, cryptocurrencies are almost always controlled in a decentralized manner (CBDC). The general consensus holds that a cryptocurrency is said to be centralized if it is “minted,” or created before it is issued, or if it is issued by a single issuer. 

Each cryptocurrency functions as a public financial transaction database when it is implemented with decentralized governance. This is accomplished through the use of distributed ledger technology, which often takes the form of a blockchain. Traditional asset classes such as currencies, commodities, and equities, in addition to macroeconomic considerations, have only a limited exposure to the profits generated by cryptocurrencies.

A cryptocurrency is a type of digital asset that can be traded or used as a form of digital money. Cryptocurrencies are built on blockchain technology and can only be found on the internet. Because of their reliance on encryption to verify and secure transactions, cryptocurrencies are known by their acronym. There are already more than a thousand distinct forms of cryptocurrency in circulation across the globe.

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The values of cryptocurrencies have experienced both increases and decreases over the course of the past few years. There is no assurance that an investor will complete a purchase or trade at the best possible price while using a cryptocurrency marketplace. As a consequence of this, a great number of investors make use of arbitrage in order to discover the price differences that exist across a number of markets. Bitcoin was the first cryptocurrency to operate without a central authority and was made available for download as open-source software in 2009. There were over 9,000 different cryptocurrencies available for purchase on the market as of March 2022, and over 70 of those cryptocurrencies had a market capitalization that was greater than $1 billion.

CHAPTER 2: The Rising History of Cryptocurrency

David Chaum, an American cryptographer, came up with the idea for an anonymous form of cryptographic electronic currency in 1983 and termed it ecash. 

In the next year, 1995, he put it into action by utilizing Digicash, an early type of encrypted electronic payment. In order to withdraw Digicash from a bank and select certain encryption keys before they could be delivered to a destination, the user of the Digicash system was forced to use special software. This made it impossible for the bank that issued the digital currency, the government, or any other third party to trace the digital currency.

The National Security Agency (NSA) published a paper in 1996 titled “How to Make a Mint: the Cryptography of Anonymous Electronic Cash,” which described a cryptocurrency system. The paper was initially distributed through an MIT mailing list, and it was later published in 1997 within The American Law Review (Vol. 46, Issue 4).

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Wei Dai released a description of “b-money” in 1998. The term “b-money” refers to an anonymous, distributed electronic monetary system. Nick Szabo provided a description of bit gold not long after that. Bit gold (not to be confused with the later gold-based exchange, BitGold) was described as an electronic currency system that required users to complete a proof of work function with solutions being cryptographically put together and published. This system, along with Bitcoin and other cryptocurrencies that would follow it, is what led to the development of the cryptocurrency market.

Bitcoin, the world’s first decentralized cryptocurrency, was developed in 2009 by a developer known only as Satoshi Nakamoto, who is thought to be a pseudonym. Within its proof-of-work protocol, it made use of a cryptographic hash function known as SHA-256. Namecoin was first introduced in April 2011 with the intention of establishing a decentralized domain name system (DNS), which would make it challenging to restrict content on the internet. Shortly after that, in October 2011, Litecoin was introduced with script as its hash function rather than SHA-256. Peercoin, an additional noteworthy cryptocurrency, utilized a hybrid proof-of-work and proof-of-stake system. 

The United Kingdom (U.K.) announced on August 6, 2014, that the Treasury has commissioned a study into cryptocurrencies in order to determine what function, if any, they could play in the economy of the United Kingdom. The study was also supposed to report on whether or not there should be consideration given to regulation. Its concluding report was distributed to the public in 2018, and in January of 2021, it launched a consultation on crypto assets as well as stable coins.

person holding a bitcoin

El Salvador was the first country in the world to recognize Bitcoin as a form of legal tender in June 2021. This achievement came about as a result of the Legislative Assembly’s approval of a law proposed by President Nayib Bukele that defined Bitcoin as a kind of legal tender. Cuba passed Resolution 215 in August 2021, which recognized and regulated cryptocurrencies such as Bitcoin and other digital currencies. All cryptocurrency transactions were made illegal by the Chinese government in September 2021, bringing to a close a crackdown on cryptocurrency that had previously restricted the operation of middlemen and miners within China. China was the single largest market for cryptocurrencies at the time.

Altcoins and Stablecoins

Alternative cryptocurrencies, often known as “altcoins” or “alt coins,” are a collective term that refers to all tokens, cryptocurrencies, and other types of digital assets that are not Bitcoin. 

The term is typically simplified to “altcoins.” Given that Bitcoin serves as a blueprint for the protocol that is used in the creation of altcoins, Paul Vigna of The Wall Street Journal referred to altcoins as “different versions of Bitcoin.” When contrasted to Bitcoin, altcoins frequently include fundamentally distinct characteristics. For instance, in contrast to Bitcoin’s block processing time of 10 minutes, Litecoin’s goal is to complete one every 2.5 minutes. This makes it possible for Litecoin to confirm transactions more quickly than Bitcoin. 

different crypto coin

One such illustration of this would be Ethereum, which features functionality known as smart contracts and enables decentralized applications to be executed on its blockchain. According to Bloomberg News, Ethereum was the most popular blockchain in 2020. According to the New York Times, it has the highest “following” of any alternative cryptocurrency in the year 2016. The term “altseason” is frequently used to allude to significant price increases across alternative cryptocurrency exchanges.

Alternate cryptocurrencies known as stablecoins are those that aim to keep a constant value in terms of their purchasing power. It is important to note that these designs are not infallible because a lot of stable coins have fallen or lost their peg. One example of this is the crash that occurred on May 11, 2022, with Terra, in which UST fell from $1 to 26 cents and linked token Luna fell 99.9 percent.

CHAPTER 3: How Does Cryptocurrency Actually Work?

A decentralized cryptocurrency is one that is produced by the entire cryptocurrency system as a group, at a rate that is determined at the time the system is founded and which is made public. 

crypto currency coin

In financial and economic systems that are centralized, such as the Federal Reserve System in the United States, corporate boards or governments are in charge of controlling the supply of currency. In the case of decentralized cryptocurrencies, enterprises or governments are unable to create new units, and they have not offered any form of support for other businesses, banks, or corporate entities that possess asset value measured in it. The organization or individual who goes by the name Satoshi Nakamoto is credited with the creation of the fundamental technical system upon which decentralized cryptocurrencies are founded. As of the month of May 2018, there were over 1,800 different cryptocurrency specifications.

Miners are a community of parties within a proof-of-work cryptocurrency system like Bitcoin that are mutually distrustful of one another. They are responsible for maintaining the safety, integrity, and balance of ledgers within the system. The transactions are then added to the ledger in line with a certain timestamping method with the help of the miners’ computers, which help validate and timestamp the transactions. In a blockchain that uses proof-of-stake, sometimes known as PoS for short, holders of the linked cryptocurrency validate transactions. These holders are commonly gathered together in stake pools.

The majority of cryptographic currencies are programmed to limit the maximum amount of a particular currency that may ever be in circulation. This is accomplished by reducing the rate at which the currency can be created. When compared to regular currencies, which are typically stored by financial institutions or kept as cash on hand, it can be more difficult for law enforcement to seize cryptocurrencies because they are decentralized and private.

cryptocurrency

Apart from that, pseudonymity, as opposed to anonymity, is maintained by Bitcoin due to the fact that the digital currency stored in a wallet is not connected to its owner in any way but rather to one or more unique keys (or “addresses”). Therefore, Bitcoin owners can’t be traced, but the blockchain keeps a record of all their transactions and makes them accessible to the public. Despite this, cryptocurrency exchanges are frequently compelled by law to gather users’ personal information in order to comply with regulatory requirements. Additions like Monero, Zerocoin, Zerocash, and CryptoNote have been proposed as possibilities, as they would allow for more anonymity and fungibility respectively.

Blockchain

The legitimacy of each cryptocurrency’s coins is guaranteed by a distributed ledger known as a blockchain. 

A blockchain is a list of records, also known as blocks, that are linked to one another and safeguarded through the use of cryptography. This list is continuously expanding. On a blockchain, each block will typically have a timestamp, transaction data, and a hash pointer that points to the previous block in the chain. Blockchains, by their very nature, are not susceptible to having their underlying data altered in any way. 

Blockchain token

“An open, distributed ledger that may record transactions between two parties in an efficient, verifiable, and permanent manner” is what it is called. A blockchain is often administered by a peer-to-peer network that collectively adheres to a protocol for validating new blocks. This is done so that the blockchain can be used as a distributed ledger. Once data has been recorded in a specific block, it cannot be changed in a retroactive manner without also changing the data in all subsequent blocks, which requires the cooperation of the majority of users on the network.

Blockchains, which are an example of a distributed computing system with high Byzantine fault tolerance, are inherently secure due to the nature of the system. As a result, a decentralized consensus has been accomplished with the help of a blockchain.

Nodes

A computer that is connected to a cryptocurrency network is referred to as a node in the cryptocurrency industry. 

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The node contributes to the network of the cryptocurrency in one of three ways: by validating transactions, relaying transactions, or by hosting a copy of the blockchain. When it comes to the transmission of transactions, each computer that makes up the network (a node) has its own copy of the blockchain associated with the cryptocurrency that it supports. When a transaction is made, the node that created the transaction broadcasts the information of the transaction to other nodes throughout the node network using encryption. This ensures that the transaction, along with every other transaction, is visible to all of the nodes in the network.

People who own nodes are either volunteers, people who are hosted by the organization or entity that is responsible for building the technology behind the bitcoin blockchain network, or people who are tempted to host a node in order to get rewards from hosting the node network.

Timestamping

To “prove” the legitimacy of transactions uploaded to the blockchain ledger without the requirement for a trusted third party, cryptocurrencies use a variety of timestamping systems. 

olieman eth

The proof-of-work approach was the very first timestamping method that was ever developed. SHA-256 and scrypt are the two proof-of-work methods that have seen the most widespread use. CryptoNight, Blake, SHA-3, and X11 are a few examples of additional hashing algorithms that can be utilized for proof.

The proof-of-stake technique is yet another method that can be utilized. Users are asked to demonstrate that they are in possession of a predetermined amount of a cryptocurrency as part of the proof-of-stake protocol, which is a way for protecting a cryptocurrency network and establishing distributed consensus. It is not the same as proof-of-work systems, which confirm electronic transactions by using complex hashing algorithms. The coin plays an extremely important role in the scheme, although there is not yet a standardized version of it. A hybrid proof-of-work and proof-of-stake consensus mechanism is utilized by certain cryptocurrencies.

Mining

Mining is the process of verifying transactions that takes place within cryptocurrency networks. 

Bitcoin mining and crypto currency

Miners that are successful in their endeavors are rewarded with newly created bitcoin for their efforts. By providing an additional incentive for participants to contribute to the overall processing power of the network, the reward lowers the transaction fees that are charged. The rate of producing hashes, which are used to validate each transaction, has been boosted as a result of the utilization of specialized computers such as FPGAs and ASICs that execute sophisticated hashing algorithms such as SHA-256 and scrypt. Since the introduction of Bitcoin in 2009, there has been a race to develop computers that are both inexpensive and efficient.

The process of generating hashes for the purpose of validation has become increasingly difficult over time as a result of an increase in the number of people getting involved in the world of virtual currency. As a result, miners are being forced to invest increasingly large sums of money to improve their computing performance. As a consequence of this, the incentive for discovering a hash has decreased, and as a result, it frequently does not justify the investment in machinery, cooling facilities (to offset the heat that the machinery creates), and the electricity required to run the machinery. Some of the most desirable locations for mining are those that have low-cost electricity, a chilly climate, and laws and regulations that are straightforward and business-friendly. As of July 2019, it was estimated that Bitcoin used roughly 7 gigawatts of electricity, which is approximately 0.2 percent of the total amount of electricity used worldwide and is similar to the amount of energy that Switzerland uses on a national level.

A number of miners collaborate to share resources and their processing power across a network in order to divide the reward fairly and according to the amount of effort that each miner contributes to increasing the likelihood of discovering a block. Members of the mining pool who present a valid partial proof of work are rewarded with a “share” of the cryptocurrency.

piling coins

The Chinese government has, as of the beginning of February 2018, put a stop to the trade of virtual currencies, outlawed initial coin offerings, and terminated mining operations. Since then, a significant number of Chinese miners have settled in Texas and Canada. As a result of the historically low price of gas, one company has begun establishing data centers for mining activities at facilities located within Canadian oil and gas fields. In June of 2018, Hydro Quebec made a proposal to the provincial government to provide cryptocurrency mining businesses with an allocation of 500 Megawatts of power. According to a study published by Fortune in February 2018, Iceland has emerged as a refuge for cryptocurrency miners in part due to the country’s relatively low cost of electricity.

In an effort to protect the city’s natural resources and its “character and direction,” the municipality of Plattsburgh, located in the state of New York’s north-central region, enacted a mining ban in March 2018, which will remain in effect for the next 18 months. Kazakhstan overtook Sweden as the second-largest country for the mining of cryptocurrencies in February 2022, contributing 18.1 percent of the total world hash rate. In the vicinity of Ekibastuz, the nation has constructed a compound that houses 50,000 computers.

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GPU Price Rise

In 2017, there was a rise in the demand for graphics processing units (GPU) due to the surge in cryptocurrency mining. (Because of their increased computing capacity, GPUs are ideally suited for the process of hash generation.) 

GPU Price Rise

Graphics cards, including Nvidia’s GTX 1060 and GTX 1070, as well as AMD’s RX 570 and RX 580 GPUs, either tripled in price or saw their prices quadruple as a result of increased demand from cryptocurrency miners or went completely out of stock. Even though it originally retailed for $450, a GTX 1070 Ti may now be purchased for as much as $1100. The GTX 1060 (6 G.B. variant), another popular card, was marketed with a suggested retail price of $250 but ultimately sold for almost $500. AMD’s RX 570 and RX 580 graphics cards were unavailable for purchase for close to a year. Miners typically purchase the full available supply of newly released GPUs as soon as they become available. Nvidia has requested that shops do whatever they can to focus on selling graphics processing units (GPUs) to gamers rather than miners. Boris Bohles, who serves as the P.R. manager for Nvidia in the German region, has stated that “Gamers come first for Nvidia.”

Wallets

The public and private “keys” (addresses) or seeds for a cryptocurrency are stored in a cryptocurrency wallet. These “keys” can be used to receive or spend the cryptocurrency. 

It is feasible to write in the public ledger if you have the private key, which allows you to spend the bitcoin linked with the transaction. It is possible for other people to deposit funds into the wallet as long as they have the public key.

bitcoin emblem

There are a number of different approaches to storing keys or seeds within a wallet. Among these methods is the use of paper wallets, which consist of public, private, or seed keys written on paper; the use of hardware wallets, which are pieces of hardware that store your wallet information; the use of a digital wallet, which is a computer with software that hosts your wallet information; the hosting of your wallet using an exchange that deals in cryptocurrency; and the storage of your wallet information using a digital medium such as plaintext.

CHAPTER 4: Cryptocurrency, Scams & Their Relationship with The Economy

The vast majority of cryptocurrency transactions take place away from the oversight of traditional financial and political institutions and take place solely on the internet.

Transaction Fees

The quantity of network bandwidth at any given time is the primary factor that determines transaction costs for cryptocurrencies. 

Stolen Money

This is contrasted with the desire from currency holders for transactions to be processed more quickly. The person who holds the currency has the ability to select a particular transaction cost, while the businesses that make up the network conduct transactions in the order of highest suggested fee to lowest. Exchanges for cryptocurrencies can make the process easier for holders of the underlying currency by providing priority options and, as a result, determining which fee is most likely to result in the transaction being performed within the allotted amount of time. 

Transaction fees for Ether are determined by the computational difficulty, bandwidth use, and storage requirements of the transaction, whereas Bitcoin transaction fees are determined by the size of the transaction and whether or not the transaction employs SegWit. During the month of September 2018, the median transaction cost for Ether was equivalent to $0.016, while the median transaction fee for Bitcoin was equivalent to $0.55. The transaction prioritizing and anti-spam mechanism in some cryptocurrencies is provided through client-side proof-of-work rather than the use of transaction fees. This is the case with some cryptocurrencies.

Block Rewards

Cryptocurrencies that are based on proof-of-work, like Bitcoin, provide block rewards as an incentive for miners. In the past, there has been a tacit notion that the fact that miners are paid by block rewards or transaction fees does not influence the integrity of the blockchain. However, a study reveals that this may not always be the case depending on the specifics of the situation.

cyptocurrency coin justice

The supply of the coin is increased by the rewards that are given out to miners. As long as there are benevolent nodes that control the bulk of the processing power, the integrity of the network may be protected by ensuring that the process of confirming transactions is a time-consuming and expensive endeavor. To ensure that the verification process is expensive enough to reliably authenticate public blockchains, the verification algorithm necessitates a significant amount of computer power and, consequently, electricity. 

Not only are miners required to take into account the costs associated with expensive equipment that is required to have any chance of solving a hash problem, but they are also required to take into account the large quantity of electrical power that is required in the hunt for a solution. Even though the block rewards typically outweigh the expenditures on electricity and equipment, this is not always guaranteed to be the case.

The reward system is supported by the current value of the cryptocurrency rather than the value it will have in the long run. This is done to encourage miners to participate in costly mining activities. According to a number of publications, the current design of Bitcoin is extremely inefficient and results in a loss of 1.4 percentage points of welfare in comparison to a cash system that operates effectively. The high cost of mining, which is anticipated to amount to 360 Million United States Dollars annually, is the primary cause of this inefficiency. This suggests that customers are willing to accept a cash system that has an inflation rate of 230 percent before they are in a better position to use Bitcoin as a form of payment. 

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However, the effectiveness of the Bitcoin system can be considerably enhanced by maximizing the rate at which new coins are generated and reducing the fees associated with conducting transactions. Altering the consensus protocol entirely is one additional potential method of enhancement that might be utilized to get rid of ineffective mining activities.

CHAPTER 5: Exchange Mechanisms

Customers are able to swap cryptocurrencies for other assets, such as traditional fiat money, or trade between multiple digital currencies while using cryptocurrency exchanges.

Atomic Swaps

Atomic swaps are a method that allows for the direct exchange of one cryptocurrency for another cryptocurrency, bypassing the necessity for a trusted third party like an exchange.

bitcoin gold background

ATMs

On February 20, 2014, Jordan Kelley, the founder of Robocoin, opened the first Bitcoin automated teller machine (ATM) in the United States. 

The identity of customers can be verified using scanners that can read government-issued identification documents like driver’s licenses and passports. The kiosk that was put in Austin, Texas, is quite similar to bank automated teller machines (ATMs).

Initial Coin Offerings

An initial coin offering, more commonly known as an ICO, is a contentious method of fund-raising for new cryptocurrency business. 

In order for entrepreneurs to sidestep regulation, they can turn to an initial coin offering (ICO). However, securities regulators in many jurisdictions, including the United States and Canada, have indicated that if a coin or token is a “investment contract” (e.g., under the Howey test, i.e. an investment of money with a reasonable expectation of profit based significantly on the entrepreneurial or managerial efforts of others), then it is a security and is subject to securities regulation. 

one holding a 50 dollar bill and a bitcoin for another

This is the case because an investment contract is an investment of money with a reasonable expectation of profit based significantly on the During the initial coin offering (ICO) campaign, early supporters of the project are offered the opportunity to purchase a portion of the cryptocurrency (often in the form of “tokens”) in return for fiat currency or other cryptocurrencies, most commonly Bitcoin or Ether.

According to PricewaterhouseCoopers, four of the ten largest initial coin offers that have been suggested have chosen Switzerland as their base. In Switzerland, these organizations are usually registered as non-profit foundations. The Swiss regulatory agency FINMA has stated that it will take a “balanced approach” to initial coin offering (ICO) projects and that it will allow “legitimate innovators to navigate the regulatory landscape” in order to launch their projects in a manner that is consistent with national laws protecting investors and the integrity of the financial system. A legislative working group on initial coin offerings (ICO) started issuing legal guidelines in 2018, in response to several requests from industry stakeholders. The goals of these recommendations are to remove confusion from cryptocurrency offerings and to build sustainable business practices.

To get the “market cap” of any coin, just multiply its current price by the total number of coins that are currently in circulation. The entire market capitalization of cryptocurrencies has historically been dominated by Bitcoin, which accounts for at least fifty percent of the market cap value. The market cap values of altcoins have climbed and fallen in relation to Bitcoin’s market cap value. The value of bitcoin is mostly influenced by speculation, in addition to other technologically limited elements known as blockchain rewards, which are incorporated into the architecture technology of bitcoin itself. 

bitcoin and chart

The market capitalization of cryptocurrencies tends to follow a pattern that is referred to as the “halving.” This is the process by which the block rewards obtained from Bitcoin are halved due to technologically mandated limited factors that are ingrained into Bitcoin, which in turn limits the supply of Bitcoin. The “halving” trend can be seen in recent years. The total value of cryptocurrencies on the market tends to climb just before a halving (which has happened twice in the past), and then it begins to decrease again.

By the middle of June 2021, wealth managers in the United States had begun to promote cryptocurrencies as a 401(k) investment option, despite the fact that it was an apparently exceedingly volatile asset class for portfolio diversification. When compared to more traditional financial assets such as company stocks, the prices of cryptocurrencies are notoriously unstable. In the first week of May 2022, the value of Bitcoin dropped by 20 percent, Ethereum dropped by 26 percent, while Solana and Cardano dropped by 41 and 35 percent, respectively. The declines were attributed to concerns about the economy’s inflationary potential. During the same week, both the Nasdaq technology stock index and the FTSE 100 experienced declines of 7.6 percent and 3.6 percent, respectively.

In the longer term, only four of the ten major cryptocurrencies that were identified in January 2018 based on the total value of coins in circulation were still in that position in early 2022. These cryptocurrencies were Bitcoin, Ethereum, Cardano, and Ripple (XRP). There are other centralized databases that store cryptocurrency market data that exist apart from the blockchain itself. The blockchain is a decentralized ledger, whereas these databases are centralized and maintained by a single administrator. 

cryptocurrency

This is one of the key differences between these databases and the blockchain. The administrator is responsible for managing the data and determining the times when users can access it. In contrast to the blockchain, databases are relatively quick to use because there is no need to verify transactions. Coinmarketcap, Coingecko, BraveNewCoin, and Cryptocompare are the top four most prominent databases that track the cryptocurrency market, respectively.

CHAPTER 6: Crypto Scams and Increasing Regulation Around The Globe

Because of the surge in popularity of cryptocurrencies and the increasing number of financial institutions that are using them, some governments are beginning to investigate whether or not regulation is necessary to safeguard customers. 

The Financial Action Task Force (FATF) has referred to companies that offer services related to cryptocurrencies as “virtual asset service providers” (VASPs) and has recommended that these companies be subject to the same requirements for anti-money laundering (AML) and know your customer (KYC) regulation as traditional financial institutions.

Gold Coins

IVMS 101 is a worldwide common language that was published in May of 2020 by the Joint Working Group on interVASP Messaging Standards. Its purpose is to facilitate the transfer of required information regarding originators and beneficiaries among VASPs. During the process of developing the data model, the FATF, as well as financial regulators, were kept updated.

The Financial Action Task Force (FATF) revised its advice in June 2020 to include the “Travel Rule” for cryptocurrencies. This rule stipulates that VASPs are required to gather, store, and exchange information regarding the originators and beneficiaries of virtual asset transfers. Following the establishment of further standardized protocol standards, the use of JSON was suggested for the transmission of data between VASPs and identification services. As of the end of the year 2020, the three global standard-setting bodies that were responsible for developing the IVMS 101 data model have not yet completed and ratified the model.

A digital finance strategy was eventually issued by the European Commission in September of 2020. This contained a draught regulation on Markets in Crypto-Assets (MiCA), the goal of which was to develop an all-encompassing regulatory framework for digital assets in the European Union.

cryptocurrency token

The Basel Committee on Banking Supervision released a proposal on June 10, 2021, suggesting that financial institutions that held cryptocurrency assets be required to set aside capital to cover any future losses. For instance, if a bank were to store Bitcoin worth $2 billion, the bank would be required to set aside sufficient capital to cover the entire $2 billion. This need would remain in place regardless of whether or not the bank really held Bitcoin. When it comes to the evaluation of their other holdings, banks are typically held to a standard that is not as stringent as this one. Having said that, this is merely a suggestion and not a regulation.

The International Monetary Fund (IMF) is looking for a way to supervise cryptocurrencies that are coordinated, consistent, and thorough. During an interview in January 2022, Tobias Adrian, the financial counselor for the International Monetary Fund and the head of the organization’s monetary and capital markets department, stated that “Coming to an agreement on global laws is never a rapid process. However, if we get a head start right now, we will not only be able to achieve our goal of preserving financial stability, but we will also be able to reap the benefits that the technological innovations that lie beneath it bring.”

United States

In 2021, legislation and resolutions regarding the regulation of cryptocurrencies were passed by 17 states. 

silver and gold coin

The United States Securities and Exchange Commission (SEC) is now deliberating over the next course of action to take. Sen. Elizabeth Warren, a member of the Senate Banking Committee, sent a letter to the chairman of the SEC on July 8, 2021. In the letter, she demanded that the SEC provide answers on cryptocurrency regulation by July 28, 2021. Her motivation for making this demand was the rise in the use of cryptocurrency exchanges and the risk that this poses to consumers. Eun Young Choi was appointed the first director of a National Cryptocurrency Enforcement Team on February 17, 2022, by the United States Department of Justice. The team’s mission is to assist in the identification of inappropriate uses of cryptocurrencies and other digital assets and to devise solutions to these problems.

China

The ability of financial institutions and payment businesses in China to provide services linked to transactions involving cryptocurrencies was made illegal on May 18, 2021. 

As a result, the value of the most prominent proof-of-work cryptocurrencies experienced a precipitous decline. Bitcoin, for example, experienced a decline of 31 percent, while Ethereum experienced a decline of 44 percent, Binance Coin experienced a decline of 32 percent, and Dogecoin experienced a decline of 30 percent. The second area of focus was proof-of-work mining, and officials in prominent mining regions pointed to the fact that Bitcoin and Ethereum are created using electricity generated from extremely polluting sources like coal as the reason for their concern.

Forex Graph

The Chinese government’s campaign on cryptocurrencies was finally finished in September 2021 when it announced that all transactions involving cryptocurrencies of any type were outlawed.

United Kingdom

Starting on January 10, 2021, the Financial Conduct Authority will require all cryptocurrency businesses in the United Kingdom, such as exchanges, advisors, and professionals, to register with them in order to continue operating legally. 

This requirement applies to businesses that have a presence in the U.K. market, sell products there, or provide services there. Additionally, on June 27, 2021, the financial watchdog asked that the largest cryptocurrency exchange in the world, Binance, stop all regulated activity in the United Kingdom.

crypto coins

South Africa

According to reports, South Africa, which has been victimized by a significant number of fraudulent activities associated with cryptocurrencies, is in the process of putting a regulatory timeline into place, which will result in the production of a regulatory framework. 

Raees Cajee and Ameer Cajee, the two founders of an African-based cryptocurrency exchange known as Africrypt, vanished in April 2021 with a total of $3.8 billion worth of Bitcoin. This event is considered to be the largest swindle that has ever taken place. Additionally, in January of 2021, Mirror Trading International vanished without a trace, taking 170 million dollars’ worth of cryptocurrencies with them.

South Korea

South Korea passed new regulations to tighten its oversight of digital assets in March 2021. These new regulations came into effect that month. In order to comply with the requirements of this Act and continue doing business in South Korea, all digital asset managers, providers, and exchanges are required to register with the Korea Financial Intelligence Unit.

crypto controversy

In order to register with this unit, all exchanges will need to obtain certification from the Information Security Management System (ISMS), and the exchanges will also need to guarantee that all consumers have real-name bank accounts. In addition to this, the CEO and board members of the exchanges must not have been convicted of any crimes, and the exchange must have adequate levels of deposit insurance to compensate for losses incurred as a result of hacking.

El Salvador

El Salvador made history on June 9, 2021, when it became the first nation to declare that it will acknowledge bitcoin as a form of legal money.

Turkey

The Central Bank of the Republic of Turkey has announced that as of April 30, 2021, the use of cryptocurrencies and crypto-assets for the purpose of making purchases will no longer be permitted. The rationale behind this decision is that the use of cryptocurrencies for such payments presents significant transaction risks.

cryptocurrency

India

At this time, India does not restrict nor encourage participation in the cryptocurrency market through investing. The ban on cryptocurrencies, which had been issued by the Reserve Bank of India, was eventually overturned by the Supreme Court of India in the year 2020. 

Since that time, investments in cryptocurrencies have been regarded as lawful, despite the fact that questions remain unanswered regarding the scope of taxable income, the manner in which taxes should be paid on that income, and the regulatory framework governing cryptocurrencies. On the other hand, it is possible that the Indian Parliament could soon create a particular law that will either outright outlaw the cryptocurrency market in India or regulate it in some fashion. Hemant Batra, a prominent public policy lawyer and Vice President of SAARCLAW (South Asian Association for Regional Co-operation in Law), provided his public policy opinion on the Indian cryptocurrency market to a well-known online publication. 

Hemant Batra stated that the “cryptocurrency market has now become very big with involvement of billions of dollars in the market; therefore, it is now unattainable and irreconcilable for the government to completely ban all sorts of cryptocurrency.” Instead of outright prohibiting cryptocurrency transactions, he proposed regulating the market for them. In this sense, he advocated adhering to the criteria established by the IMF and FATF.

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CHAPTER 7: Legality of Cryptocurrency with Regards to Current Scams

The legal position of cryptocurrencies varies significantly from one nation to the next, and in many of those nations, it is still unclear or is in the process of shifting. 

At the very least, one study has demonstrated that broad generalizations regarding the usage of Bitcoin in illicit finance are significantly overblown and that blockchain analysis is an excellent tool for fighting crime and acquiring intelligence on criminals. While some nations have made it clear that they welcome their usage and commerce, others have outright prohibited or severely restricted it. An “absolute ban” on trading cryptocurrencies or utilizing them is in effect in eight nations as of 2018, according to the Library of Congress. 

These countries are Algeria, Bolivia, Egypt, Iraq, Morocco, Nepal, Pakistan, and the United Arab Emirates. A so-called “implicit ban” is in effect in a further 15 nations, including Bahrain, Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Lithuania, Macau, Oman, Qatar, Saudi Arabia, and Taiwan, among others. These countries are: Bangladesh, China, Colombia, the Dominican Republic, Indonesia, Iran, Kuwait, Lesotho, Macau, Oman State and provincial securities regulators in the United States and Canada, working together through the North American Securities Administrators Association, are conducting investigations into “Bitcoin scams” and initial coin offerings (ICOs) in forty different jurisdictions.

credit cards

Bitcoin has been categorized in a variety of ways depending on whatever government agency, department, or court you look at. At the beginning of 2014, the China Central Bank issued a regulation that prohibited Chinese financial institutions from engaging in any activity involving bitcoins. Although it is permissible to own cryptocurrencies in Russia, locals are required to use the national currency, the ruble, when transacting with one another. Visitors and those who do not live in the country are free to use any currency they like. It’s likely that regulations and prohibitions imposed on Bitcoin will also apply to other similar cryptocurrency systems. The Central Bank Digital Currency was going to be the Bank of Thailand’s very own cryptocurrency, which they announced their intentions to establish in August of 2018. (CBDC).

U.S. Tax Status and Advertising Bans

The United States Internal Revenue Service (IRS) decided on March 25, 2014, that Bitcoin will be regarded as property for the purposes of determining how taxes should be paid on it. 

Because of this, virtual currencies are treated as commodities and are liable to taxes on capital gains. Advertisements relating to cryptocurrencies are currently prohibited on Google, Twitter, Bing, Snapchat, LinkedIn, and MailChimp for the time being. Baidu, Tencent, and Weibo are three Chinese internet platforms that have joined Weibo in banning marketing for bitcoin. Both the Japanese platform Line and the Russian platform Yandex have the same restrictions on what users may and cannot do on their platforms.

crypto graph

An Unregulated Global Economy as A Legal Concern

Since the introduction of Bitcoin in 2009, there has been a rise in both interest in and demand for virtual currencies online. Concurrently, there has been a rise in the level of concern that the decentralized, person-to-person global market that cryptocurrencies enable may pose a risk to society. There is widespread concern that alternative cryptocurrencies could one day serve as tools for anonymous online criminals.

A lack of regulation in cryptocurrency networks has been criticized for aiding criminals who aim to cheat taxes and launder money. This criticism stems from the fact that cryptocurrency networks currently lack regulation. There is also the potential for money laundering to occur with routine bank transfers; however, when making wire transfers from one bank to another, for example, the account holder is required to at least show evidence of their identity.

Because the transactions that take place through the use of and exchange of these alternative cryptocurrencies are not dependent on traditional banking institutions, this independence can make it easier for individuals to avoid paying taxes. Because the amount of taxable income is determined by what a recipient reports to the revenue service, it is exceedingly challenging to account for transactions that were conducted using existing cryptocurrencies. This is because cryptocurrencies are a mode of exchange that is both complicated and hard to keep tabs on.

art rachen

The anonymity protocols that are built into the majority of cryptocurrencies can potentially be utilized for the purpose of simplifying the process of money laundering. Laundering money with altcoins can be accomplished through anonymous transactions, as opposed to laundering money through a complex network of financial actors and offshore bank accounts.

The use of cryptocurrency makes it more difficult to police laws against extremist groups, which ultimately gives these organizations an advantage. White nationalist Richard Spencer went so far as to call Bitcoin the “currency of the alt-right” in one of his recent statements.

CHAPTER 8: Why Is Cryptocurrency So Hard to Recover?

Those that got in on the Bitcoin craze early on and made investments in the cryptocurrency are currently enjoying enormously profitable returns on their capital. 

Even though its value can be unpredictable at times, the Bitcoin market is now trading at an average of $18,000 per coin. This is wonderful news for those persons who have Bitcoin hidden away and can cash them out at any time, but what about those individuals who have misplaced their Bitcoins? These days, tales of people who “could have been” Bitcoin millionaires are commonplace. Some of these “would-be” Bitcoin millionaires ended up losing access to their private keys, forgetting the passwords to their online wallets, or even throwing away hard drives by accident that contained the cryptocurrency. Elon Musk recently revealed on Twitter that he, like many other people, had lost some Bitcoin. Research conducted by the company Chainalysis, which specializes in digital forensics, estimates that around 4 million coins have been misplaced across the globe.

Scam Help

In spite of the fact that using it is becoming as simple as using a credit card, it is essential to be aware that, in contrast to credit cards, cryptocurrencies do not come with any built-in protections for customers. For instance, if a customer observes an unusual transaction on their credit card or bank statement that may indicate fraud, all they have to do to get their money back is a dispute that charge. Regrettably, cryptocurrencies do not support chargebacks, and the resolution of disputes does not instantly result in additional monies being added to an account.

This is mostly due to the fact that crypto-assets are not guaranteed or insured by government-sponsored programmes that were developed to safeguard consumers and investors’ money. In the event that your financial institution falls bankrupt, the Federal Deposit Insurance Corporation (FDIC) will cover the standard sum of $250,000 for each deposit account, including checking and savings accounts. 

This protection applies to all deposit accounts. Nevertheless, this does not apply to cryptocurrencies in any way. In the event that your brokerage firm goes out of business, the Securities Investor Protection Corporation (SIPC) will protect up to $500,000 worth of the cash and securities that are held in your brokerage account. It bears repeating that this does not include cryptocurrency. Even while people have come to put their trust in a number of different cryptocurrency wallets and exchanges in order to conduct secure transactions, it is important to remember that if your crypto assets are lost, hacked, or stolen, there is typically no way to get them back.

crypto cube

How Does One Lose Cryptocurrency?

Many losses might be ascribed to thefts committed by hackers; nevertheless, the majority of the time, we can only blame ourselves because we failed to maintain track of our private keys, which the majority of people choose to store in a digital wallet. 

It is imperative that a private key is never divulged to any third party. Because it is mathematically tied to all of the Bitcoin addresses that were established for the wallet, if you lose it, even the people who created Bitcoin won’t be able to help you. Additionally, if you forget the password to the digital wallet that stores the private key, it will be nearly impossible for you to retrieve your Bitcoin. This is due to the fact that, in contrast to other types of online accounts, there is no central authority that can assist you in retrieving your Bitcoin or in resetting your password. Because of this, your passwords are the keys to your finances when it comes to bitcoin and digital wallets; if you lose your access, you will lose your assets.

Mt. Gox, the most prominent cryptocurrency exchange in the world, filed for bankruptcy in February of 2014. The company said that it had lost approximately 750,000 Bitcoins belonging to its customers, and the loss was most likely the result of theft. This amounted to nearly 7 percent of all Bitcoins that are currently in circulation and had a total value of 473 million dollars. Hackers, who had taken advantage of the transaction malleability issues in the network, were to blame, according to Mt. Gox. The price of a Bitcoin reached an all-time high of over $1,160 in December, but it had dropped to less than $400 by February.

abus titalium

Tether said on November 21, 2017, that it had been the victim of a breach, which resulted in the theft of $31 million worth of USDT from its core treasury wallet. Nicehash, a cryptocurrency exchange based in Slovenia, announced on December 7 that hackers had stolen almost $70 million from the company using a computer that they had taken over.

After being the victim of two separate cyberattacks in the same year, Yapian, the owner of the South Korean cryptocurrency exchange Youbit, declared bankruptcy on December 19, 2017. Customers were still allowed access to 75% of their assets despite the disruption. In May of 2018, unknown cybercriminals took control of Bitcoin Gold transactions and exploited them inappropriately. It is estimated that exchanges lost $18 million, and Bittrex removed Bitcoin Gold from its platform after it failed to pay its proportionate share of the losses.

On September 13, 2018, Homero Josh Garza was handed a sentence that included a prison term of 21 months, to be followed by a period of three years of supervised release. In 2014, Garza launched the cryptocurrency enterprises GAW Miners and ZenMiner. In 2015, he pled guilty to wire fraud after admitting in a plea deal that the companies were part of a pyramid scheme. 

coins with piggybank

Garza was finally compelled to pay a judgment of $9.1 million-plus $700,000 in interest after being subjected to a separate civil enforcement action that was conducted against him by the United States Securities and Exchange Commission (SEC). According to the complaint filed by the SEC, Garza had engaged in fraudulent activity by selling “investment contracts representing shares in the profits they claimed would be created” from mining through the firms he controlled.

Coincheck, a Japanese cryptocurrency exchange, revealed in January 2018 that hackers had stolen coins worth $530 million. The cryptocurrency exchange Coinrail in South Korea was hacked in June of 2018, resulting in the loss of roughly $37 million worth of cryptocurrencies. The theft contributed an additional $42 billion to a selloff that had already been going on in the cryptocurrency market. 

The cryptocurrency exchange Bancor, whose source code and fundraising efforts had been the topic of debate, had $23.5 million worth of cryptocurrency stolen on July 9, 2018. According to the findings of a report published by the E.U. in 2020, consumers have lost crypto-assets with a value of hundreds of millions of dollars due to security breaches that occurred at exchanges and storage providers. Between the years 2011 and 2019, there were anything from four to twelve reported breaches each year. In 2019, it was revealed that cryptocurrency assets worth more than a billion dollars had been stolen. Stolen property “usually finds its way to unlawful markets and is used to fuel additional criminal activity,” according to the phrase.

uk currency graph

According to a report that was produced in 2020 by the Cyber-Digital Task Force of the United States Attorney General, the three categories listed below account for the vast majority of illegal uses of cryptocurrencies: “financial transactions associated with the commission of crimes; money laundering and the shielding of legitimate activity from tax, reporting, or other legal requirements; or crimes, such as theft, directly implicating the cryptocurrency marketplace itself.” The findings of the report come to the conclusion that “for cryptocurrency to realize its truly transformative potential, it is imperative that these risks be addressed,” and that “the government has legal and regulatory tools available at its disposal to confront the threats posed by cryptocurrency’s illicit uses,” respectively.

According to the U.K. 2020 national risk assessment, which is a comprehensive assessment of the risk of money laundering and terrorist financing in the U.K., the danger posed by the use of crypto assets like Bitcoin for the purposes of money laundering and terrorist financing is rated as “medium” (from “low” in the previous 2017 report). Legal academics have hypothesized that the prospects for money laundering may be more imagined than they are in reality. The blockchain analysis company Chainalysis came to the conclusion that illegal activities such as cybercrime, money laundering, and the financing of terrorist organizations made up only 0.15 percent of all crypto transactions conducted in 2021, totaling $14 billion. 

This represents a very small portion of the overall market. A phishing link set up by the hacker in December 2021 caused a non-fungible token (NFT) project called Monkey Kingdom, which was based in Hong Kong, to suffer a loss of cryptocurrencies valued approximately USD 1.3 million.

man top on the coin

CHAPTER 9: Is There Anything That Can be Done if Your Cryptocurrency Has Been Scammed From You?

Contact the Exchange Immediately

If your assets were stored with a larger and more well-known exchange, then that exchange is most certainly aware of the situation, and they have most likely started the process of recovering from it. 

It is possible that you are not the only person to have been affected by this, and as a result, it is quite likely that they have already begun working to comprehend the problem in order to attempt to recover assets on behalf of their clients. Having said that, it is essential that you are aware that they are not insured by the government, and as a result, it is possible that not all of your assets will be returned.

Consult a Crypto-Hunter

Cryptohunters are persons or firms that, as their name suggests, search for cryptocurrency that has been misplaced, stolen, or lost on behalf of victims. 

They may also be able to assist in recovering lost private keys and passwords that have been forgotten. The search for and recovery of lost, inaccessible, or stolen cryptocurrencies is the primary focus of cryptohunters, who collaborate with law enforcement organizations as well as holders of cryptocurrencies. They often charge a set price and employ specialized software to produce millions of possible passwords.

Do you suspect that someone had scammed you?

If you have any suspicion of a scam or phishing attack, then you can rely on EZChargeback to help you with protection, mitigation, and fund recovery

You will feel safe knowing that experts with years of experience will be guiding you!

CHAPTER 10: What to Do If the Crypto Assets Are Stolen or Lost?

If you’ve put money into cryptocurrencies like Bitcoin, Ether, or any other type, here are two things you should know: Your savings are a tempting target for criminals, and it may be difficult to retrieve your money if the worst should happen to you. 

Hacking incidents at cryptocurrency exchanges occur with startling regularity. One of the largest heists ever committed took place in August of this year when cybercriminals stole a total of $610 million worth of cryptocurrency from the Chinese network known as Poly Network. After some time, the cybercriminals gave back the money.

That is a very unusual occurrence. In 2014, thieves stole $450 million worth of Bitcoin and other cryptocurrencies from the Japanese cryptocurrency exchange Mt. Gox, which led to the business’s forced bankruptcy. The cryptocurrency exchange BitMart recently reported that it had been the victim of a “large-scale security breach” caused by the theft of private keys, which resulted in the equivalent of approximately $150 million being taken by cybercriminals. On Monday, the exchange said that it had temporarily halted withdrawals while conducting an investigation into the crime. 

piling coins

People who are known to possess huge quantities of cryptocurrency have also been the subject of attacks. In November, Canadian authorities said that they had detained a teenager from Hamilton, Ontario, in connection with the theft of 36.5 million Canadian dollars worth of bitcoin, valued at 46 million Canadian dollars. According to the authorities, this is the most cryptocurrency that has ever been stolen from a single person.

Report the Incident

It is quite doubtful that filing an official report will assist in retrieving lost or stolen cryptocurrency, but having a case number or evidence is never a bad idea. 

You never really know what kind of legal action or insurance claim you might find yourself involved in until it happens. If you find yourself in a situation where you need to demonstrate standing, having proof that shows you took the theft seriously will be helpful. The Federal Bureau of Investigation (FBI) and private crypto-tracing organizations have been successful in recovering cryptocurrency in some instances. For instance, in the case of the ransomware attack on the Colonial Pipeline, the FBI, with the assistance of tracking experts, was able to retrieve around $2.3 million of the $4.4 million that had been paid in Bitcoin as ransom. On the other hand, it is quite improbable that the federal authorities would go to such great efforts for the typical person.

usb bitcoin

Contact Customer Service

It is more probable that you will receive assistance if the trade in question is larger and more well-known. 

According to Gunn, if you move quickly, your exchange may be able to freeze your assets. However, this will depend on what stage the theft is at. Be conscious of the fact, though, that many exchanges aren’t obligated to assist you in any significant way. A number of exchanges are situated in nations that have relatively lax regulatory environments for cryptocurrencies. According to Pezet, crypto is not recognized as an asset in many nations, which makes the likelihood of receiving assistance from the authorities much less likely.

CHAPTER 11: Is the Blockchain Traceable?

Since the outset, bitcoin and other cryptocurrencies have had a reputation for providing users with an increased level of privacy and anonymity. 

The first white paper that introduced blockchain technology via bitcoin in 2008 made mentioned the possibility of complete anonymity when using the technology. As a result of the fact that bitcoin enables transactions to be carried out directly between peers over the internet, the concept behind the activity is that only two people are involved. There is no requirement for the use of banks, governments, or other intermediaries. 

crytpo currency transfer

But how anonymous are cryptocurrency transactions actually, especially in light of the recent theft of $3.6 billion worth of bitcoins and other recent examples? Because Bitcoin has recently gained popularity among more traditional investors, the concept of conducting business in private has become significantly more problematic. If this monetary activity can be tracked, cryptocurrencies such as bitcoin are more pseudonymous than they are anonymous.

Because of the attention paid by the federal government to crimes involving cryptocurrencies and the growing sophistication of methods used by law enforcement to track down illegal payments made using cryptocurrencies, transactions of this kind are no longer anonymous. But there’s a more straightforward explanation for why normal Americans can’t truly conduct these kinds of transactions in complete secrecy, and it has nothing to do with the increase in resources devoted to combating cryptocrime.

Transactions in cryptocurrencies are usually public by nature since they are recorded on a distributed ledger called a blockchain. Users benefit from some degree of anonymity as a result of the fact that trades in cryptocurrencies are not always tied to an individual’s identification. Although there are some items and services that may be purchased directly with bitcoin, in most situations, the cryptocurrency must be converted into the country’s native currency before it can be spent. And the process of turning bitcoin into U.S. dollars, a currency that is extensively controlled and backed by the federal government, leaves a distinct paper trail.

WORRIED THAT SOMEONE HAS YOUR PERSONAL & BUSINESS INFORMATION?

With how easy it is for scammers to acquire your data, it’s reasonable to be alarmed. Protect yourself and your loved ones by getting advice from experts. 

We will guide and even help you get your money back from scammers.

CHAPTER 12: Get Acquainted with The Best Asset Recovery Firms for You Through Ez Chargeback!

Reviewing Submitted Request

As soon as you get in touch with Ez Charge, they will begin analyzing your situation and working on it as fast as possible. 

Because falling victim to an online scam is a race against the clock, most recovery companies do not like to spend any time. After that, a professional investigator from their team will get in touch with you to discuss your situation in greater depth, provide you with individualized recovery options, and walk you through the process step by step. After that, you will be contacted by an investigator who will guide you through the procedure every step of the way.

Broker Review and Collection of Evidence

At this point, they will begin the early phases of creating your case and will lead you through the laborious yet exhaustive process of gathering evidence that is pertinent and significant to your case. 

money in a jar

This proof will be essential in retrieving your funds, and it comprises all of the materials such as pertinent e-mails, phone calls, messages, photo content, billings, invoices, the perpetrator’s digital footprint, and more information.

Building A Case for You

They will begin organizing your information in a way that is both efficient and effective so that it can be presented to the relevant financial bodies as soon as their team of investigative specialists has finished reviewing the evidence that you have provided, your case has been determined to be eligible for a refund, and all of the materials are made available to them. 

Despite the fact that this may appear to be a straightforward endeavor, there is actually quite a bit more involved. When dealing with financial institutions, you need to have an in-depth knowledge of the regulations and legislation that apply in different countries throughout the world. In addition, the presenter is required to have extensive knowledge regarding a variety of topics, including financial terms of service, agreements, and many others.

Rebate Scam

Recovering Your Money

Now, there are two different approaches that can be taken to deal with this situation. 

To begin, Ez Charge might go directly to the fraudster and confront them. The con artist will give back the money seventy-six percent of the time because they are petrified of being caught by the police and want to avoid having to answer to them. However, if that approach is unsuccessful, government authorities will turn to the participation of financial institutions. In most cases, they will work in conjunction with payment service providers such as PayPal and Skrill, amongst others, in order to track down the con artist and retrieve your lost funds.

Key Takeaways!

Notifying the right authorities is the first and most critical step to take in the event that any suspicious behaviour is thought to have taken place. 

Those who invest in online trading may find it difficult, if not impossible, to ascertain whether money was lost as a result of the natural risks that are inherent to trading or whether the loss was the result of illegal activity, especially if they do not seek the assistance of an expert. It is also very difficult, if not impossible, to determine whether or not you have been a victim of a scam without the assistance of an expert. If you want to protect yourself and get your money and property back in the event that you have been scammed, it is imperative that you get in touch with a scam recovery firm like the one mentioned above.

do you need help?

A lot of those who contact us have questions and concerns about their personal and business data being compromised. We aim to arm you with the legal and technical know-how in the fight against scams. Also, we will be able to refer you to top scam recovery agencies.

Please fill up the form. Rest assured that our support team will get in touch with you

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