Crypto Fraud is Growing Exponentially (yahoo.com) 86
The Los Angeles Times reports on "a massive surge of criminal fraud that has been pummeling crypto users with unknown billions of dollars in losses with little relief in sight."
The growth in crypto fraud has turned exponential in recent years. The reported losses from crypto scams in 2021 were 60 times larger than in 2018, the Federal Trade Commission reported earlier this month, with crypto now accounting for 1 out of every 4 dollars lost to fraud in the reports monitored by the agency. Over 46,000 people lost more than $1 billion in crypto to scams since 2021, but the real sum of losses is likely vastly larger because most frauds are not reported, the agency said.... "Since 2021, $575 million of all crypto fraud losses reported to the FTC were about bogus investment opportunities, far more than any other fraud type," the agency reported.
Financial losses specifically from NFT crimes just through May this year were already more than 600% higher than for all of 2021, with the space seeing twice as many hacks and bigger and bigger heists, according to analysis from digital privacy firm Top10VPN.
For many victims, there's little hope of getting their lost art back. The marketplaces where NFTs get sold — crypto exchanges — can't cancel or reverse fraudulent transactions the way a traditional bank or credit card company might; the whole point of crypto was to cut out these sorts of financial middlemen, which many crypto fans greatly distrust. Crypto technology was built out of a "libertarian ethos" in which "there's no nanny state that's going to take care of you," said Jeremy Goldman, an intellectual property attorney who specializes in legal issues involving crypto assets. "These are the consequences when there's a mistake ... there's no one to unwind it, you can't call customer service, you can't go back to the mothership, you can't go back to the bank."
But at the same time, law enforcement agencies in the U.S. have also shown a growing willingness and ability to mount sophisticated investigations into crypto fraud.... [I]n March, federal agents sought a court order to seize roughly $165,000 worth of Ethereum in a digital Binance.US wallet. Officials said the cryptocurrency had been stolen from an Orange County investor, nicknamed "P.M.," who got tricked into giving up his coins by an fraudster pretending to be a Coinbase technical support representative.
On the bright side, BuzzFeed notes that actor Seth Green has recovered his prized Bored Ape NFT from "Mr Cheese" for $297,000 worth of Ether.
But the Los Angeles Times points out that another victim of a Bored Ape heist has sued the creators of Bored Apes. Their lawyer argues the company "refuses to police their own community. They're the gatekeepers, they can lock out the thieves if they wanted to, and they won't do it."
Financial losses specifically from NFT crimes just through May this year were already more than 600% higher than for all of 2021, with the space seeing twice as many hacks and bigger and bigger heists, according to analysis from digital privacy firm Top10VPN.
For many victims, there's little hope of getting their lost art back. The marketplaces where NFTs get sold — crypto exchanges — can't cancel or reverse fraudulent transactions the way a traditional bank or credit card company might; the whole point of crypto was to cut out these sorts of financial middlemen, which many crypto fans greatly distrust. Crypto technology was built out of a "libertarian ethos" in which "there's no nanny state that's going to take care of you," said Jeremy Goldman, an intellectual property attorney who specializes in legal issues involving crypto assets. "These are the consequences when there's a mistake ... there's no one to unwind it, you can't call customer service, you can't go back to the mothership, you can't go back to the bank."
But at the same time, law enforcement agencies in the U.S. have also shown a growing willingness and ability to mount sophisticated investigations into crypto fraud.... [I]n March, federal agents sought a court order to seize roughly $165,000 worth of Ethereum in a digital Binance.US wallet. Officials said the cryptocurrency had been stolen from an Orange County investor, nicknamed "P.M.," who got tricked into giving up his coins by an fraudster pretending to be a Coinbase technical support representative.
On the bright side, BuzzFeed notes that actor Seth Green has recovered his prized Bored Ape NFT from "Mr Cheese" for $297,000 worth of Ether.
But the Los Angeles Times points out that another victim of a Bored Ape heist has sued the creators of Bored Apes. Their lawyer argues the company "refuses to police their own community. They're the gatekeepers, they can lock out the thieves if they wanted to, and they won't do it."
That's fascinating (Score:2)
Because the value of cryptocoins is decreasing exponentially.
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Yes, but which extreme will we hit first? One where every single coin is stolen ad infinitum... or the one where the value goes to zero...
In which case why bother?
Scamable (Score:5, Insightful)
It's entirely a scam! (Score:2)
It's entirely a scam! The only justifiable, legitimate use of crypto is for political dissidents in totalitarian regimes, and even they barely use the stuff.
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There are coin tumblers and such, but yes, cash and third parties are the way to go.
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Re: Scamable (Score:2)
By buying "crypto", you are identifying yourself as someone ready and willing to be scammed.
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Maybe scammers have caught on to the fact that crypto owners are easily scammed. After all they have already invested in what is basically a scam.
And that crypto itself is the ideal medium for scamming.
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And that crypto itself is the ideal medium for scamming.
NFTs are giving crypto a run for its money in the scamming department, and the fact that NFTs and crypto go hand in hand is no accident.
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Seth Green didn't "recover" his stolen NFT, he just bought it back from the scammer for over $100,000 more than he paid for it the first time. He's now spent almost half a million dollars on a JPEG.
The message is clear. Crypto bros are both easy to scam and willing to throw good money after bad to get their stolen JPEGs back.
Re:Greater fool theory expanded. (Score:5, Insightful)
You did just explain the model of a pyramid scam, a ponzi scheme... and that's all that cryptocurrency is.
"Making money" in cryptocurrency means finding a bigger fool to sell too. The goal of EVERY cryptocurrency holder is to cash what they had out into real money and leave some other sucker holding the bag. And that's why it's collapsing so hard right now - it hit the point where there are no "bigger fools" left to create another layer of the pyramid.
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You did just explain the model of a pyramid scam, a ponzi scheme... and that's all that cryptocurrency is.
"Making money" in cryptocurrency means finding a bigger fool to sell too. The goal of EVERY cryptocurrency holder is to cash what they had out into real money and leave some other sucker holding the bag. And that's why it's collapsing so hard right now - it hit the point where there are no "bigger fools" left to create another layer of the pyramid.
Thus the last fool holding the bag.
I'm not sure this crash was caused by (Score:3)
That said as someone else pointed out years ago the video game Second Life had something on the order of several hundred million dollars worth of it's in game currency in existence up until someone tried to cash out some of the currency they had. That then r
My expectation... (Score:4, Funny)
Seth Green's NFT "heist" was a publicity stunt (Score:2)
I find it amusing anybody believed that Seth Green's supposedly stolen NFT was anything more than a publicity stunt to promote his idiotic animated series.
Have you seen the clips from that thing? (Score:3)
Fake libertarians (Score:2)
Fake libertarians love Crypto. Real ones would object to yet another fiat currency.
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Isn't any currency a fiat currency? Gold is only valuable because it's rare, and it's only a viable "currency" if your government says you can use it to pay taxes or fines, which makes it "fiat". If someone towed an asteroid with a mass of 10,000,000 metric tons into earth orbit and discovered it was 80% gold, what would happen to your currency?
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I think people miss the fact that the most important difference between crypto currencies and government-backed fiat currencies boils down to one simple thing:
Crypto currency drivers have no social responsibility to crypto currency holders when the currency crashes, so they have no reason not to drive the "worth" of their currency upward.
Government-backed fiat currencies that crash result in more people who cant afford housing, food and basic things in life, which means the governments get to pick up that t
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Gold has a value floor. It's properties make it a useful metal. Even if the tgobernments of the world all say screw it, we're out, gold will still retain it's intrinsic value, even if that is lower than it's current valuation.
When is the last time you needed to plate a little bitcoin on a contact to make it work better?
If fiat paper money, fractional dreserve, etc is bad, then Crypto is out of the frying pan and into the fire.
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The utility of gold for industrial purposes is pretty small.
There is about 1/1000 of an ounce in a typical cell phone, and there are a few other uses like shielding in outer space, but most of the value of gold is as something to hoard. Jewelry and money are the top two current uses of gold. Beyond that ceramics have mostly replaced gold in dental work which was another big use of gold.
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Is that because gold has little industrial use, or because it's so expensive?
Aluminium used to be awfully expensive and for a while was rarer than gold, and was used as a precious metal. Then we figured out how to make it cheaply, and look, it's everywhere.
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It's very expensive so they use as little as possible. An ounce of gold would cost more than the phone. But in spite of that expense, it is used in every phone because it has a really high utility.
Re: Fake libertarians (Score:2)
The astroid will be cut to pieces and disappear, and the people involved in the asteroid recovery operation would be cut to pieces and disappear.
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We all know the straight up real libertarians are those that embrace the Land Value Tax
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Georgists aren't well-liked in libertarian circles. They demand a state; most libertarians believe a state should be optional.
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Wouldnt that specifically be ancaps though? Most libertarians I have encountered preach minarchism, especially the American variety who usually just want small federal government
Of course most libertarians seem unable to agree what a libertarian is, which is only natural.
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Of course most libertarians seem unable to agree what a libertarian is, which is only natural.
I think that's because, deep down, they know that they're just people who are disproportionately angry about having to pay taxes.
Re: Fake libertarians (Score:2)
And that's why even though I was half joking I said the Georgists were the true libertarians.
Pining for some zero tax stateless society is just as silly as the anarcho communists they love to make fun of so much.
The theory that you could replace all taxes with a LVT does have some merit to it though, and it has the potential to draw in varied political beliefs. I think the libertarians are dead in the water for another few decades if they don't do something big like that, for those that actually care about
As the old saying goes... (Score:2)
There is no honor among thieves.
Actor Seth Green has recovered his prized Bored Ape NFT from "Mr Cheese" for $297,000 worth of Ether.
This is utterly ridiculous and proof that this "marketplace" is not sustainable. For a market to succeed among patrons, it must have fidelity. Imagine if it was legal for a thief to break into a house and change the locks, which would then transfer ownership of the house to the thief. People will stop buying homes, not only because they won't have the means to protect them
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Surely that can't be true because... (Score:2)
crypto in general is just one big scam. :-)
Really? (Score:2)
I thought with the collapse, it would finally be over, and now it's growing again?
Oooh! (Score:2)
Or was it marketing for his new show all along?
So what I take away from this (Score:5, Insightful)
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Bordering?
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It's not just the investors. Many of the platforms that trade NFTs are hopelessly insecure. One scammer uploaded a load of counterfeit NFTs that had the little "verified" marker simply copied into the image itself, making them appear legit.
I've noticed that one of the downsides of consumer protection and banking security laws is that people assume they are safe even when they are not.
Crypto.... (Score:2)
Cryptocurrency is a very impressive technology because it manages to be a pyramid scheme, a ponzi scheme, an insider trading scheme,
AND money laundering scheme. At the same time!
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"New Shimmer is both a floor wax and a dessert topping."
And you just outed yourself as being very old. Like me. Good one.
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One of the features of blockchain? (Score:1)
Oh wow an industry with zero regulation (Score:3)
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It's almost as if it was designed that way.
You Get What You Deserve (Score:1)
Anyone one since the inception of Bitcoin and other crypto, that got involved with it in any way deserves to lose what ever they payed into it, and then some. They did so for 1 of only two reasons⦠they are incredibly stupid and gullible, or patently greedy that was looking to scam someone else. In either situation they deserve to lose it all just as a way of reminding them how stupid they were. For those who got in, scammed the next greater fool and got out, they too should suffer⦠an
Chumps are finally learning the truth. (Score:2)
Crypto has always been a scam. Some criminals and tax dodgers were willing to lose a percentage to do money laundering. Their losses fueled the "profits" of the traders, which attracted lot more FOMOs and believers on the greater fool theory.
The money launderers are realizing the limits of the operation, and criminals are realizing it is not as anonymous as they thought. The real identity behind the wallets can be traced, law
It's already pretend money (Score:4, Insightful)
How much more "pretend" does it have to be before it becomes fraud?
Re: It's already pretend money (Score:2)
How much more "pretend" does it have to be before it becomes fraud?
If everything is unregulated, how can there be fraud?
Fraud has a specific legal definition; and my understanding of cryptocurrency is that it wanted as much distance between itself and messy things like fraud as possible.
Metere quod seminas.
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"Fraud" may have a specific legal definition. But it also has a general, common definition. https://en.wiktionary.org/wiki... [wiktionary.org]
Any act of deception carried out for the purpose of unfair, undeserved and/or unlawful gain.
Fraud doesn't have to meet the specific legal definition to be, in fact, fraud.
I don't know about cryptocurrency attempting to avoid fraud. It seems to me the whole point was to avoid regulation, which is a recipe for fraud.
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How much more "pretend" does it have to be before it becomes fraud?
Dunno. NFT values are about as valid as high-priced art, and we've been supporting that scam for decades within the elite class.
(Yes, we can stop pretending they're all art aficionados.)
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Just because we don't understand the high prices fetched by unique works of art, doesn't make them pretend. When you buy a work of art, you are buying something that you can actually possess, that no one else can possess because it is truly unique. You can protect your possession by storing it in a safe place, to protect it against theft or gunshots or thrown pieces of cake.
When you buy an NFT, you don't actually own anything. That URL you think you bought will disappear and become worthless, probably a lot
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When you buy an NFT, you don't actually own anything.
It (supposedly) gives you the 'right' to claim 'ownership' of a row in a database.
Most people think the NFT is the image (and vice versa) but that's not the case.
The associated image is not the NFT, it's just a visual placeholder.
It's not a picture of any particular bored ape or whatever- all the image is is a unique visual marker (a placeholder) and it has no actual relation to the NFT itself, none at all.
The thing is, the placeholder can be changed, swapped, altered, or removed at anytime and -according t
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Just because we don't understand the high prices fetched by unique works of art, doesn't make them pretend. When you buy a work of art, you are buying something that you can actually possess, that no one else can possess because it is truly unique. You can protect your possession by storing it in a safe place, to protect it against theft or gunshots or thrown pieces of cake.
Yes, and we can also pretend that some shit (sometimes even actual shit) slapped on a canvas is worth seven figures, while the business own, er I mean "art aficionado" discuss with a fine-art insurance agent how much they're going to dedu, er I mean "value" this incredibly rare piece of not-a-tax-dodge.
NFTs essentially hold value for the same reason art does; feeding pretentious emotions and financial corruption. A COA doesn't magically hold it's value in the market. That only means someone might eventual
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You might find that NFTs are a bit problematic if you are not the original owner of an NFT and the creator of the NFT fails to uphold their
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Well, and if you look at the five elements of a valid contract published at Cornell Law School [cornell.edu]:
Ironically enough, even a referenced standard of contract definitions, had to include "some" fine print to really clarify that contracts are not black and white. Kind of like how Capitalism is now Too Big To Fail in "some" industries. Many shady shades of grey.
You might find that NFTs are a bit problematic if you are not the original owner of an NFT and the creator of the NFT fails to uphold their end of the contract.
You also mind find fine art storage a bit problematic when you're the owner, and the storage vendor fails to uphold their end of the contract and prevent a physical theft or fire. Naturally that's where the other half of the fine art scam kicks in(
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When Maurizio Cattelan tapes a banana to a wall and sell that for $120.000 [artnet.com], the person buying that definitely does not buy an object that can be objectively valued to $120.000. What a person buying the $120.000 banana is actually buying, is a contract where Cattelan waives his right to tape other bananas to walls, and grants the buyer the right to tape a banana to a wall and to say "this is Maurizio Cattelan's work." The owner can then sell his contract to another owner, hopefully at a higher price, the pri
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This is what is known as a "straw man" argument. No typical person would insist that taping a bandana to a wall is really "art" or is really valuable. But that doesn't mean that no art is valuable or unique. That bandana will likely soon be forgotten, because modern art is, if nothing else, fickle. In that sense, your example is apt, all these NFTs are likely to be soon forgotten.
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I think too that the taped banana will go down the drain of history, to be honest, specially if we consider the long term. In 3000 years, taped bananas will be forgotten, but the Great Pyramids will still be there.
On the other hand, I think John Cage's scores [wikipedia.org] will remain. This is also a kind of immaterial work, so it has 0 "physical object" value, but as long as copies of the work are around and get transmitted from generation to generation, people won't cease to wonder about it and think of ways to reinter
Compared to Blake Lemoine (Score:2)
"Bored ape" seems like an object of sanity and reason.
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"Bored ape" is also a pretty good description of the average reader of this "story".
Quite frankly: Crypto is done for. We get it. Tell us when GPUs become affordable again and then let's talk about something meaningful.
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This time there's a pretty good reason for its crash. While it may recover, it's more likely that some new scam emerges from the ashes when investors need something to park their money at again.
Tax on stooopid (Score:2)
History repeats itself (Score:2)
Same with food. It used to be a mess until the govt stepped in
Same thing is now happening in Crypto
Of course it is. (Score:2)
You go where the marks are.
Cryptocurrencies are a form of Investment Fraud (Score:1)
'Cryptocurrency' was ALWAYS fraud (Score:2)
Nanny state (Score:1)
Crypto technology was built out of a "libertarian ethos" in which "there's no nanny state that's going to take care of you," said Jeremy Goldman
And this is why libertarians are stupid.
They have a bunch of thought terminating cliches, like calling anything and everything a "nanny state", as if that's the only alternative to unbridled freedom. All they have to say is "nanny state", and everyone of them nods like sheep.
What next, are they going to call reproducible backups "nanny state"?
Are brakes on cars nanny states?
Chumps, fools? (Score:1)
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The problem as I believe it to be is that crypto has a triple headed problem set:
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I don't understand (Score:2)
It serves no (non criminal) purpose that isn't far better served by... banks.
not unexpected (Score:2)
Crypto wanted freedom (Score:2)
Intentional confusion (Score:2)
"For many victims, there's little hope of getting their lost art back..."
The NFT isn't the art, it's the receipt; seems the journalist fell for the most common scam.
Fools and their money (Score:2)
Exponentially (Score:2)
Exponentially? Really? Data please. "Journalists" are ignoramuses. The only major whose job it is to tell others about stuff they know nothing about.