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International Conference on Financial Cryptography and Data Security

FC 2015: Financial Cryptography and Data Security pp 44–61Cite as

There’s No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams

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Part of the book series: Lecture Notes in Computer Science ((LNSC,volume 8975))

Abstract

We present the first empirical analysis of Bitcoin-based scams: operations established with fraudulent intent. By amalgamating reports gathered by voluntary vigilantes and tracked in online forums, we identify 192 scams and categorize them into four groups: Ponzi schemes, mining scams, scam wallets and fraudulent exchanges. In 21 % of the cases, we also found the associated Bitcoin addresses, which enables us to track payments into and out of the scams. We find that at least $11 million has been contributed to the scams from 13 000 distinct victims. Furthermore, we present evidence that the most successful scams depend on large contributions from a very small number of victims. Finally, we discuss ways in which the scams could be countered.

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Notes

  1. 1.

    https://bitcointalk.org/index.php?topic=576337.

  2. 2.

    Data and analysis scripts are publicly available at doi:10.7910/DVN/28561.

  3. 3.

    Note that we deliberately make no attempt to deanonymize the actual victims beyond identifying that the addresses participated in the scam.

  4. 4.

    https://web.archive.org/web/20140322111925/https://leancy.com/.

  5. 5.

    https://bitcointalk.org/index.php?topic=448250.

  6. 6.

    https://bitcointalk.org/index.php?topic=576337#post_toc_38.

  7. 7.

    https://bitcointalk.org/index.php?topic=263445.msg3417016.

  8. 8.

    https://bitcointalk.org/index.php?action=profile;u=106769.

  9. 9.

    https://bitcointalk.org/index.php?action=profile;u=109912.

  10. 10.

    https://bitcointalk.org/index.php?action=profile;u=323407.

  11. 11.

    https://bitcointalk.org/index.php?action=profile;u=58460.

  12. 12.

    https://www.reddit.com/user/LutherForThePeople.

  13. 13.

    http://ow24et3tetp6tvmk.onion/.

  14. 14.

    http://easycoinsayj7p5l.onion/ and https://web.archive.org/web/20130905204338/https://easycoin.net/.

  15. 15.

    https://web.archive.org/web/20140213235218/https://bitcoinwallet.in/.

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Acknowledgments

This work was partially funded by the Department of Homeland Security (DHS) Science and Technology Directorate, Cyber Security Division (DHS S&T/CSD) Broad Agency Announcement 11.02, the Government of Australia and SPAWAR Systems Center Pacific via contract number N66001-13-C-0131. This paper represents the position of the authors and not that of the aforementioned agencies.

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Authors and Affiliations

  1. Computer Science and Engineering Department, Southern Methodist University, Dallas, Tx, USA

    Marie Vasek & Tyler Moore

Authors
  1. Marie Vasek
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  2. Tyler Moore
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Corresponding author

Correspondence to Marie Vasek .

Editor information

Editors and Affiliations

  1. University of Innsbruck, Innsbruck, Austria

    Rainer Böhme

  2. NTT Laboratories, Tokyo, Japan

    Tatsuaki Okamoto

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Vasek, M., Moore, T. (2015). There’s No Free Lunch, Even Using Bitcoin: Tracking the Popularity and Profits of Virtual Currency Scams. In: Böhme, R., Okamoto, T. (eds) Financial Cryptography and Data Security. FC 2015. Lecture Notes in Computer Science(), vol 8975. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-662-47854-7_4

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  • DOI: https://doi.org/10.1007/978-3-662-47854-7_4

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  • Publisher Name: Springer, Berlin, Heidelberg

  • Print ISBN: 978-3-662-47853-0

  • Online ISBN: 978-3-662-47854-7

  • eBook Packages: Computer ScienceComputer Science (R0)

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