In the new article Vladimir Okhotinikov, a renowned cryptocurrency and blockchain expert, reveals a problem of fraud in crypto business. The crypto industry is witnessing a frightening surge in scams and fraudulent activities. He explains the upward trend with the growing activity in this field. As more users engage with cryptocurrencies, fraudsters and hackers come up with more deceptive practices and illicit schemes. They are technically-savvy, well-organized and employ the advanced technologies to attack crypto platforms, hacking those who are less cautious about security.

Daily criminal reports on cyber crimes have become commonplace. The fraud is carried out on an industrial scale. According to the analysis of the Federal Trade Commission (FTC), US consumers lost over a billion dollars due to fraud involving cryptocurrencies from January 2021 to March 2022.

Though investors and common users lose billions of dollars to crypto scams, they still neglect even basic security measures. While it may be impossible to shield against all IT threats, in the opinion of the author, minimizing risks to curb losses is well within reach. The article also includes recommendations to crypto users to help them stay secure.

Also, Vladimir draws parallels between fraud in the crypto business and the nuances of blockchain technology. In particular, he highlights the distinctive traits of blockchain, empowering scammers to orchestrate attacks resulting in substantial financial losses.

Primary challenges of cryptocurrency landscape specified by the author

The expert discusses various features and challenges associated with fraud in the crypto sphere. He highlights the unique nature of cryptocurrencies, and problems that arise when classifying assets like Bitcoin. Despite the fact that Bitcoin emerged onto the scene more than 15 years ago, regulators find it hard to categorize the asset. Initially, this was just a piece of software code, which didn’t seem significant. Many financial specialists considered it a passing fad, so the question was just ignored.

Vladimir Okhotnikov on why fraud acquired epidemic proportions

The expert delves further into the intricate world of crypto fraud, shedding light on the technologies scammers employ.  In his opinion, the accessibility of fraudulent activity poses a serious threat to the industry. Hackers and scammers have low entry barriers to start their “business” compared to traditional financial fraud.

The article also explores the anonymity aspect, illustrating challenges of identifying intruders in the cryptocurrency industry. The problem arises on the anonymity principle underlying many cryptocurrencies. Simultaneously, it creates favorable conditions for various fraud technologies making them easier to implement. The experts highlight the most widespread ones beginning from hacker attacks to social engineering going beyond the crypto industry.

Vladimir Okhotnikov defines fraud technologies to beware

He also warns about the “professionally” organized prospective startups, which promise big returns on investments. Instead, they suddenly disappear with the stakeholders’ millions. Since the prevailing number of startups just fail, investors may not even guess about fraud and lack of wonder technology behind the project.

Among fraud technologies deserving attention is a classic pump and dump scheme, famous in financial markets. It refers to manipulations organized by a group of individuals that interfere with fair market operation.  Trying to create artificial demand for certain cryptocurrency, they boost its price and then exit a position when the price is at the top. When the price enters the dump state, it starts declining. The expert advises to make informed decisions only and always stick to your strategy not being subjected to emotions to avoid getting into a trap.

Closing thoughts

Now you have a chance to explore interesting subjects with a crypto enthusiast focused on blockchain-based projects. Read Vladimir’s thought-provoking analysis to look to the future of breakthrough technologies and stay secure navigating the cryptocurrency landscape.