How to Report Bitcoin Scammers and Why You Should
Fighting back against scammers
Criminals often use cryptocurrency Bitcoin to receive payments from victims. How do you report Bitcoin scammers and does reporting do any good?
Ransomware usually demands payment in Bitcoin, as do fake blackmail sextortion scams.
Typically, scammers instruct you to buy Bitcoin and then send it to a specified Bitcoin address. A Bitcoin address is a unique string of letters and numbers that correspond to a Bitcoin payment source or destination.
Here’s one such demand from a scam email in which the sender has falsely claimed that they have recorded a compromising video of you on an adult website. They warn that they will send the video to your contacts if you don’t pay up.
If you want to prevent this, transfer the amount of $735 to my bitcoin address (if you do not know how to do this, write in Google: “Buy Bitcoin”). My bitcoin address (BTC Wallet) is: 1K1KMHpynJHQRbhzKHyik6yaJuQYxSaZCm
While Bitcoin is not completely anonymous, Bitcoin transactions offer users greater anonymity than credit cards and other types of traditional financial transactions. Information on Bitcoin.org notes:
All Bitcoin transactions are stored publicly and permanently on the network, which means anyone can see the balance and transactions of any Bitcoin address. However, the identity of the user behind an address remains unknown until information is revealed during a purchase or in other circumstances.
This makes curtailing Bitcoin scammers challenging, especially since canny criminals will take steps to protect their privacy, such as changing Bitcoin addresses and laundering the stolen funds.
So, is it Worth Reporting Bitcoin Addresses?
Unfortunately, reporting a Bitcoin address won’t immediately identify a criminal or stop their activities. Bitcoin Abuse Database notes in its FAQ:
What are you doing to shutdown the bitcoin address I report?
There is nothing we can do. No bank or government has the technical ability to freeze an account to seize funds on the blockchain. That is why criminals use bitcoin.
Our goal is to publicly documenting (sic) that certain addresses have been used in a crime. We hope that in the future it will be harder for the attacker to spend stolen bitcoin. At the very least, attackers will have to spend more on laundering the money.
But, by reporting a Bitcoin address used in a scam, you are providing a permanent and publicly accessible record of the scam attempt. For example, if you enter the Bitcoin address used in the sextortion scam above into the Bitcoin Abuse Database, you will see a report with details about the scam.
In fact, doing a Google search for the Bitcoin address reveals several reports indicating that the address has been used in scams. So, reporting addresses may help others from becoming victims.
Also, as the Bitcoin Abuse Database website points out, even hackers make mistakes. In some cases, such mistakes could reveal the real identities of people who steal Bitcoin. And the algorithms used to trace Bitcoin transactions may become more sophisticated over time, which could ultimately help identify criminals.
So, despite its limitations, reporting Bitcoin scams is still a valid way of fighting back against online criminal activity.
How to Report Bitcoin Scams
You can report Bitcoin scams via the report form on the Bitcoin Abuse website.
Alternatively, you can use the report form on the Bitcoin WhosWho website.
