Friday, December 6, 2013

NYT: The Murky World of Bitcoin Fraud

NYT writes:
[T]he excitement over this rapid ascent has obscured the fraud, hacking and outright theft that have become an increasingly regular part of the virtual currency world — even for the most sophisticated, legitimate players — and the lack of any visible response from law enforcement agencies.

This has allowed more than 30 episodes in which at least 1,000 Bitcoins — or $1 million at the current rate of exchange — were stolen or transferred illegally, according to a frequently updated list on the most popular online forum for Bitcoin. Of those cases, 10 involved losses of more than 10,000 Bitcoins, or $10 million at the current value. The authorities have only been publicly involved in one of these cases.

This week, the virtual currency world has been abuzz over a heist in which 96,000 Bitcoins — currently worth about $100 million — were said to be taken from an online marketplace known for selling illegal drugs.

Because of the murky nature of the virtual currency, thefts can be hard to verify. But the increasing stream of episodes underscores how quickly con artists can take advantage of new forms of investing and how slow the authorities can be in responding to emerging financial risks.

5 comments:

  1. Fraud? Libertarians do not believe in fraud.

    Accepting a Bitcoin for payment makes about as much sense as accepting stock in pets.com as payment back in 2000.

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    1. You're on fire today Jerry!

      Keep up the good work.

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  2. We're working on it:
    http://bitcoinism.blogspot.se/2013/12/voting-pools-how-to-stop-plague-of.html

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    1. BTW, here is an opportunity for entrepreneurs (not armchair libertarians) to provide market solutions to this type of problem. Any opportunists out there? Come and join us - it could be highly profitable.

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  3. This supports the argument that identities can be protected even though the transaction history is public. These are some very wealthy scammers that can access their wealth provided they continue to use good "operational security".

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