Bitcoin scams underline the need for major change
EARLIER this week, some of the stars of RTÉ’s Dragons’ Den took to the airwaves to disassociate themselves from an online advertising campaign promoting a get-rich-quick Bitcoin scam. Speaking on RTE Radio One’s Liveline, the affable Gavin Duffy and his fellow dragons made it crystal clear that they hadn’t endorsed the ad campaign nor the company behind it.
Unbeknownst to the Irish dragons, including Eleanor McEvoy and Eamonn Quinn, photographs of them were used as part of feature-length ‘advertorial’ on a Bitcoin proposition and how they had already made millions after being presented with the scheme by a fictitious candidate on the popular TV show. The ads promoting the scam were served up on a number of leading websites in Ireland and the UK, including The Guardian and the BBC, giving them a veneer of respectability and authenticity.
It’s a scam that has been doing the rounds for several months and not just in Ireland.
Various iterations of the same campaign using the stars of Shark Tank in Australia — the antipodean equivalent of Dragons’ Den — have been served up on websites all over the world.
According to one South African newspaper, which cited local police sources, as many as 27,500 innocent investors around the world may have lost as much as $50m in the global scam which was run by a now defunct platform called BitCoinTrader. Given the unwitting and wholly false ‘endorsement’ by some Irish dragons, it’s also highly likely that many Irish people have also been caught up in the scam.
As online scams go, it could turn out to be one of the biggest in recent years. But because it involved the parallel universe that is the cryptocurrency world, any paper or money trail — if there is one — will be extremely hard to follow. It also comes not long after the technology giant Cisco reported that a Ukrainian hacker group dubbed Coinhoarder also stole more than $50m in cryptocurrency from users of Blockchain.info, one of the most popular providers of digital currency wallets.
Once again, the thieves preyed upon their victims using a very simple technique called, wait for it, advertising. By buying up Google ads using popular search keywords, they were able to position themselves ahead of rival and legitimate cryptocurrency sites by using a range of bogus websites that managed to phish the details of bitcoin holders and clean them out in the process. Not surprisingly, the cryptocurrency craze that appears to have gripped the investment world has attracted the unscrupulous, the gullible and the downright criminal.
If there’s money to be made somewhere in the digital world, you can be sure that some sophisticated criminal element will have already thought of a dozen ways to get their grubby hands on it.
Over the last two years, it has also lined the coffers of digital advertising giants Google, Facebook and Twitter while it has spawned a mini media industry with numerous websites and blogs being set up on a monthly basis to help would-be investors get started.
Some are legitimate and do perform an important service. But others have turned out to be nothing more than shop-fronts for criminal gangs masquerading as respectable publishers with the sole aim of relieving punters of their money. What is interesting is none of this would have been possible without the oxygen that digital advertising provides and it serves as yet another reminder that the seedy underbelly of the internet is alive and thriving.
Ads promoting scams that end up on the BBC’s website don’t just arrive there by osmosis. To get there, they pass through an opaque and often swamp-like adtech ecosystem that’s not shy when it comes to making money, irrespective of where it’s coming from.
To be fair, however, Google recently announced that it will ban all adverts for cryptocurrencies, including bitcoin and initial coin offerings (ICOs), as it seeks to “tackle emerging threats”. However the ban will only come into force from June as part of a wider clampdown on unregulated financial products.
In the meantime, go and Google bitcoin and you’ll be amazed at the sheer number of websites, intermediaries, blogs and exchanges all promising to make you a millionaire.
Google’s imminent ban follows a similar ban made by Facebook in January. As part of its clampdown, Facebook is banning all cryptocurrency and ICO adverts after finding that many were being used to scam potential investors. Earlier this week, Twitter also announced its own ban after it too found that the so-called ‘crypto-Twitter’ was being used as an echo chamber for bitcoin evangelists to hype up the currency or for others to lure people into their often dubious ICOs.
While these bans are indeed welcome, the words horse, stable-door and bolted spring to mind. These bitcoin scams, as well as the many other online scams that are given oxygen by platforms, further underline the need for everyone in the complex digital supply-chain to clean it up once and for all.
I, for one, won’t be betting the house on it.