A group of thieves and scammers stole at least $ 2 million in cryptocurrency from covid-19 panic-stricken consumers, says blockchain security firm AnChain.AI. These fraudulent actions were carried out through low budget operations that are based on a classic stratagem: money paid for products never delivered.
"Criminals are exploiting the fear and uncertainty created by COVID-19 to prey on innocent citizens who are only trying to protect their health and that of their loved ones," said INTERPOL Secretary General Jürgen Stock.
How scammers hit
AnChain.AI leadership has taken a top-down approach to investigate medical supply scams for coronavirus. Fraud plans to exploit this emergency have been in place for months.
Mainly in Asia, and particularly in infected regions long before the recent spread of contagion to the west, consumers flocked to any apparent source of hard-to-find medical supplies, sometimes paying doubtful sellers with cryptocurrencies. Two weeks ago, AnChain.AI began investigating at the request of an unspecified law enforcement authority.
Investigators noted a pattern of reference: the scammers first published supplies of material on trusted e-commerce sites including Amazon, eBay and e-markets on social media; therefore they attracted consumers away from secure sites, to messaging platforms without third-party supervision; here they acquired the payment and printed a bogus shipping label as "proof" to deceive the market and the consumer.
Buyers only realized weeks after they had been scammed. Clearly the cryptocurrency payment, at that point, was no longer traceable. So far, over 90% of cryptocurrency transactions have been received in tether (USDT), 5% in bitcoin, 2% in ether and a small amount in "a wide range" of altcoins.
Many of the scams started in East and Southeast Asia, but some are spreading all over the world, including in the United States. However, the money seems to be returning to Asia. "The funds linked to the fraud appear to be going mainly through large exchanges based in Asia," said Yang, who suspects this is due to exchange and liquidity reasons (he refused to name individual exchanges).
How to buy
Coronavirus shows no signs of stopping and, as such, scammers are unlikely to stop. AnChain.AI hopes to identify the scammers at the exit point of the scam - the exchanges - likely through official law enforcement investigations and legal procedures. Purchase only through official channels like Bitcoin system.
More immediately, however, the company wishes to raise public awareness of keeping calm and paying attention to purchases. Yang offered some advice to buyers: don't buy medical supplies from untrusted markets and never do business on WhatsApp and WeChat.
"Anyone who is thinking about purchasing medical supplies online should take a moment and check that they are actually dealing with a legitimate and reliable company, otherwise your money could be given to unscrupulous criminals," said INTERPOL chief Jürgen Stock.