Cryptocurrencies have been compared by some to the Wild West, a lawless, unregulated region where anything is possible. But if someone tries to use cryptocurrencies to perpetrate a crime, this analogy typically fails. According to the Fraud Detection Officer at Melmac Solutions, “since there is no centralized body to halt fraudulent transactions, many criminals have turned to cryptocurrency.” In other words, once victims provide money, the transaction cannot be reversed.
These crooks fail to remember that the transparency of cryptocurrency transactions is one of its main selling points. In other words, a cryptographer can see how much money was delivered to them and where it was moved after that through a distributed ledger.
How Melmac Solutions Traces Cryptocurrency
Recently, Melmac Solutions using blockchain analytics in tracing the movements of the assets and using attribution technology has identified whether wallets are known to be associated with particular types of fraud or with exchanges, identifying the location of exchanges and being able to exert sufficient leverage to obtain and unfreeze assets, by disclosing information or satisfying third-party debt orders in this space, has required some creative thinking. Our licensed crypto tracing technology Chainalysis was used for the investigation by our experienced cryptographers and fraud analysts.
In this instance, the suspected scammers claimed to be establishing a new coin and an AI-powered digital trading platform while asking victims to wire money to him via the Ethereum network. Melmac Solutions tracked over $1.2 million in various cryptocurrencies that were transmitted to him. The suspected scammer’s actions with the money after receiving them were subsequently traced as well. It was evident that he was only using the victims’ money to make rapid cash withdrawals at a foreign exchange.
A similar scam is the pig butchering scam. This is one of the world’s fastest-growing scam. Fraudsters entice victims into online connections to gain their trust, subsequently persuading them to invest in bitcoin exchanges. The sites are controlled by the scammers, who would eventually take all the money and disappear without informing the victims.
Victims were never compensated
The alleged scammer frequently assured victims that he was sending them money via cryptocurrencies throughout the scam, but the victims never really received the money. The blockchain’s openness may have been used by the victims in this situation. They would have discovered that the suspected con artist never even created the transactions if they had looked at the Bitcoin mempool; a public list of transactions that have been suggested to the blockchain.
While using cryptocurrencies to defraud individuals may first seem simpler for the con artist, it frequently makes an investigation by law enforcement difficult leaving victims with no option than to hire experts with such investigative capabilities and years of experience as Melmac Solutions Limited. However, victims of fraud are not always able to fund complex recovery actions, and so funding for professionals working on an ‘at risk’ basis may be required, or a combination of both.
Why does scammers use cryptocurrency?
Scammers use cryptocurrency because there is no central bank to police fraudulent transactions. Even worse, numerous individuals are repeatedly re-targeted by so called “crypto recovery firms” that declare to assist victims in recovering their losses. Nevertheless, a lot of the time these businesses are scammers that use refund scams to attack victims again when they are weak. This is why as a professional entity we believe in transparency and importance for clients to understand exactly how we work so we can deliver the expected desired results.
Yet, it is not impossible to track all of the con artist’s activity and start working to recover the monies after the victims denounce the plan to law authorities. For more information on how we can recover your crypto, read this article.
Regrettably, how much money can be recovered may depend on where the scammer exchanged his cryptocurrency for fiat. Legitimate exchanges can be subpoenaed by law enforcement to prevent transactions and even help them find crooks. Yet, collecting the victims’ money may be challenging (not impossible) if the scammer cashes out via a foreign, offshore, unregulated exchange.
Kindly share your similar experiences with cryptocurrency fraud in the comment section below enabling others to be aware of the every possible indications of a scammer trying to get hold of their assets.