Is Crypto & Other Digital Currency an Instrument in Crime of Cyberspace

The case for Cybercrime is of utmost importance as technology advances like bitcoin and another crypto, especially with regard to the new internet wave, Web 3. There have been many instances of fraud throughout history, dating back as far as 300 BC when the merchant Hege Stratos engaged in a failed bottomry act. Since the first recorded act of fraud in history, a series of financial frauds have been reported as the world has evolved.

According to a 2002 report by the US Internet Crime Complaint Center(IC3), over $54 million had been lost through various fraud attempts. The list gets so much longer and bigger that, in 2015, the IC3 reported a $1 billion loss to fraudulent schemes.

Before diving deeper into this, let’s define the key terms we’ll explore.

Crime in Cyberspace is known as Cybercrime. Cybercrime is easily defined as using technology to facilitate illegal means and fraudulent activities.

Fraud involves using deceit or illegal means to financially exploit someone or an organization.

What Are Frauds in the Cyberspace

The term Cybercrime refers to crimes committed with the aid of technology in a more recent context.

There are multiple types of cybercrimes, some in the form of privacy breaches and others illegally obtaining digital information. Additionally, some may use anonymous blackmail to gain financial benefit.

The victim is often aware that these fraud attempts are taking place. A nonpayment attempt is the most common type of cyber fraud, usually occurring in plain sight, with the victim knowing what is happening. He willingly provides private information, putting himself at risk of becoming a victim.

These fraudsters are now armed with more powerful weapons thanks to the rise of cryptocurrency and blockchain technology. Cryptocurrencies are not inherently fraudulent, and their rise is not a consequence of their nature. However, the new technology only provides scammers with new criminal opportunities.

To fully grasp this concept, one must have a basic understanding of how cryptocurrencies work.

How Do You Know About Cryptocurrencies & the Blockchain

A cryptocurrency is a virtual currency or a means of exchange. They are peculiar because the nature of Crypto is encrypted, digital, and decentralized, which makes them nearly impossible to duplicate. Furthermore, they are not governed by a central authority regarding valuation or management. Neither a central authority nor a private firm issues them. According to theory, cryptocurrency values are not affected by the government or any internal interference because internet users set them.

The use of cryptocurrency for the payment of goods and services is widespread. Users also invest in them like resources, similar to investing in stocks and worthwhile objects.

Users can use these virtual currencies in purchases, trades, and investments with an assurance of security since they are created using cryptographic techniques. The operating system for Crypto is the blockchain. Among the most popular cryptocurrencies are Bitcoin and Ethereum, which utilize blockchains to run their operations. Aside from Bitcoin, Litecoin and Dogecoin are alternative coins.


A blockchain is a distributed ledger shared between different computer network nodes. By using peer-to-peer technology, the network keeps a secure and decentralized record of transactions. A blockchain ensures that transaction details cannot be duplicated because it keeps records encrypted.

Occurrences Of Cryptocurrencies as Instruments of Cybercrime

As cryptocurrency usage increased worldwide, cryptocurrency became more popular and gained more fame. For example, the use of blockchain wallets peaked in March 2021 when Data of Statista reported that more than 70 million wallets were in existence.

Fraudulent individuals have also used cryptocurrencies and their platforms to defraud unsuspecting individuals, among other crimes they commit in Cyberspace.

Fraudulent occurrences have been reported in several reports. The BBC recently covered the story of a man who lost his life savings and pension due to cryptocurrency fraud. The story of his loss was peculiar because he did not lose the huge sum all at once. However, using a carefully calculated process to make him unassuming by asking him to bring home £250 and gradually increasing the amount, he was made to believe he was investing in the project.

The Conversation reported another case where a student dropped out of school because he was scammed out of all his money, including a bank loan to invest in cryptocurrency. He was broke and in debt to the point of bankruptcy.

According to Statista, crypto heists made by hackers in 2021 were worth $600 million. In November 2021, a report by China Analysis stated that up to $14 billion had been scammed by cryptocurrency investors.

6 Types of Crypto Cybercrimes

Most cryptocurrency cyber crimes fall into two categories: direct scamming and attempting to gain personal information with Crypto. The following categories are here to define.

  1. Social Engineering

This social engineering is a form of psychological play, and the fraudsters often use thoughtful construction of scenarios to take financial advantage of cryptocurrency investors. However, newbie investors often fall victim to this engineering expert manipulation if they aren’t careful.

  1. Romance Scam

The romance type of cryptocurrency cybercrime is another rather interesting form. Fraudsters take advantage of the victims by getting into relationships with them and giving them their trust. However, their private keys and code for their Bitcoin wallets are among the sensitive information they reveal unknowingly. After taking advantage of them, the criminals disappear, and the pattern is often similar in every situation.

  1. Impersonation: Crypto Type

Cybercriminals take on the persona of celebrities & influencers in the case of impersonation. They sometimes pose as business experts and offer unsuspecting individuals what seems to be a deal. One peculiarity of their scheme is how they present it as a once-in-a-lifetime opportunity, which subtly motivates the victim into putting in their crypto investment. As a result, there are usually no returns, as the imposter disappears long before the victim realizes he has been duped.

  1. Rug Pull

A rug pull often occurs when investors pool their capital to fund a cryptocurrency project. However, when those who initially posed as project members vanish into thin air, they lose everything they have contributed.

  1. ICO and NFT Crypto Scams

Although such schemes can seem lucrative on the surface, it’s generally impossible not to fall victim to them unless one looks closely. It is common for scammers to present naive investors with initial coin offerings and non-fungible tokens when they are nothing more than scams. However, there are several possibilities: unregulated tokens, compromised wallets, fake websites, or the ICO itself might already be compromised.

  1. Phishing

Phishing accounts for a large proportion of cryptocurrency scams, and the main reason for this is the factors used in phishing scams. Although the approach is almost always the same, unaware investors too often fall prey to the same old strategies. However, phishing aims to get their hands on the private keys to online crypto wallets. Usually, they send emails containing links to websites where private keys must be input. If hackers get hold of these private keys, they can easily steal cryptocurrencies.

How To Avoid Becoming a Victim Of Cryptocurrency Scams

Fundamentally, you are aware of the various types of cryptocurrency fraud and crimes to avoid becoming victims of any of them. Here are some points to keep in mind before becoming a victim.

Never Give Out Your Private Keys

Private keys give you access to your cryptocurrency wallet and are yours to keep. These are personal details that should never be shared with a third party. If you see any message asking for your private keys, ignore it.

Beware Of Free Cryptocurrencies & Tokens

There is no free lunch today, as the old saying goes. The best thing to do is to be cautious when presented with offers that promise free cryptocurrency or a token. Don’t venture into a digital currency that sounds too good to be true if the marketing sounds too good.

Invest With Care If A Manager Offers Instant Growth Schemes

Another group to beware of are those claiming to be managers offering you opportunities to profit from your crypto investments. The first entity you need to do is deportment research before investing your money.

Read The Bitcoin & other Cryptocurrency Whitepaper

The white paper introducing a cryptocurrency is a huge sign of its authenticity. Generally, this document provides information on the development process for digital currencies. It is very common for fake cryptocurrencies to have poorly written white papers.

Beware Of Emails Or Text Messages Asking You To Unlock Your Account

Lastly, avoid clicking on links in emails, texts, or social media direct messages asking you to unfreeze your cryptocurrency account to avoid phishing scams. Their goal is usually to get your wallet’s private keys.

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