Which users of cryptocurrency exchanges are most likely to fall victim to scammers? Response from a Kraken representative
Kraken crypto-exchange board member and former FBI agent Curtis Ting warned investors to be very careful when dealing with digital assets. Alas, the crypto industry is “swarming” with scammers who defraud the most vulnerable categories of cryptocurrency users – the gullible elderly. According to Ting, there is “a special place in hell” for such scammers. We tell you more about what’s going on.
How to lose money on cryptocurrencies
Ting commented on his attitude towards these types of criminals with the following quote quoted by CryptoPotato reporters
I’m a former law enforcement officer myself, I also have elderly relatives. Frankly, there is a special place in hell for crooks and con artists who try to rob vulnerable and elderly people.
Obviously, it can be easier to scam novice cryptocurrency users when they are older than regular users. Still, they are usually not as confident with the Internet, so they may not find sources of correct information - including how blockchain works. Consequently, this category of users may believe in various crypto-asset "giveaways" that ask them to send a certain amount of coins to a certain address. Or the need to share a mnemonic phrase from a cryptocurrency address after some popular company or platform "calls for support". Of course, in this case, there are scammers lurking on the other side.
Kraken spokesperson Curtis Ting
Kraken follows all norms to protect its customers from hacking and fraud, but unpleasant incidents do occur from time to time. For example, not so long ago another victim of fraud was a 77-year-old exchange user, Gramm Stagg. He voluntarily transferred to fraudsters a total of one million dollars through Kraken.
How exactly he originally introduced such a large amount of fiat into the world of digital assets is a big question. It's possible he had some more experienced relative or friend helping him.
According to Ting, the trading platform has special procedures to more closely monitor suspicious transactions by elderly clients.
Not only are they flagged in the system, there are also certain transaction amounts for seniors at which the system begins to signal a high risk of fraud.
Cryptocurrencies are one of the industry’s headaches
In particular, if Kraken notices a large transfer from such an account, the user is additionally asked to clarify whether they are transferring their cryptocurrencies only of their own free will and not under pressure. Unfortunately, in the case of Graeme Stagg, there was a fatal error – the victim of the scam handed over the scammers’ money herself several times, after which they have no longer been in touch. Stagg is unlikely to see any more of the lost money.
Similar fraud prevention methods work on other platforms as well. Not long ago, during another coin withdrawal from the Binance exchange, we encountered the need to fill out a form of security-related answers that confirm the user's understanding of the basics of digital asset security. For example, among them was just the mention of sending coins to people who present themselves as employees of the cryptocurrency exchange. Since we answered all the questions correctly, the withdrawal of crypto was allowed.
It is important to note, however, that dozens of withdrawals had previously been made from this account. Consequently, this initiative proved to be something new.
In more positive news, Decrypt reports that Portugal’s central bank, which is responsible for registering virtual asset service providers in Portugal, has licensed local bank Bison Bank to operate as the country’s first crypto-bank.
Bison Bank has received approval to launch Bison Digital Assets, a company that will provide cryptocurrency storage and exchange services. Customers will be offered “a new and broader set of products and services that, in line with market trends in this new segment, meet their global needs for financial and virtual assets”.
Portugal
Bison Digital Assets’ activity will also target institutional investors with large capital, but the company has not yet disclosed which set of cryptocurrencies will be included in its services. Under the supervision of Banco de Portugal, Bison Digital Assets will comply with anti-money laundering and counter-terrorist financing regulations. It should be noted that this is not the first Portuguese crypto-bank, nor is it the first of its kind in Europe.
Kraken started something similar a couple of years ago in the US. The exchange then received a license from the state of Wyoming to create its own cryptocurrency bank. The organization within the company was called Kraken Financial. Since then, news of the gradual integration of cryptocurrencies into the range of services offered by different banks has started to appear more frequently.
We don't think cryptocurrency fraud is likely to decline. However, the popularity of digital assets is increasing and there are more investors in the field as well. Consequently, hackers have more reasons to try to cheat gullible newcomers and steal their money. Therefore, we want to believe that in the future, not only the means of protection for users of exchanges and other crypto platforms will improve, but also their education about digital assets.
What do you think about this? Share your opinion on the news in our millionaires’ cryptochat. There, discuss other important news from the world of blockchain and decentralisation.
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