Chasing Crypto Criminals

Whale Alert
4 min readJul 10, 2020


Edit: One week after we posted this story, the Giveaway scammers managed to pull off one of the biggest hacks of the decade and gained control over the Twitter accounts of Elon Musk, Bill Gates, Barack Obama, Gemini, Binance and others. The proceeds were meager (a littte over $120,000 USD) , but the scale and the boldness of the attack confirm our fears that the scammers are becoming more professional and dangerous.

During the past two weeks we have been collecting and analyzing data with the help of Scam Alert, our new blockchain crime reporting, tracking and analysis tool. We have gone through hundreds of thousands of reports from various sources, visited hundreds of websites and collected data for tens of thousands of bitcoin addresses and the results can be summarized in three words: crypto crime pays. A lot. There are dozens of different types of scams such as giveaways, sextortions, fake exchanges, fake ICO’s, bitcoin recovery, video scams, Ponzi schemes, fake tumblers, malware and the list goes on, but there is one thing all of these scams have in common: for the criminals there is almost no risk involved while victims’ lives are being destroyed.

“I’m a student. I’ve spend my whole money and send that to these wallet. After that I found that it’s a scam. Please help me for God sake. This money was my whole property. I have nothing now.”

So far we have been able to confirm 38 million US dollar in bitcoin alone stolen by scammers over the past 4 years (excluding Ponzi schemes, which are a billion dollar industry on their own), 24 million of which during the first 6 months of 2020. Some of the most successful scams made over $130,000 in a single day with nothing more than a one page website, a bitcoin address and a decent amount of YouTube advertising. Another managed to rake in over $1.5 million US dollars over the course of 6 months (and is still going strong) promoting a fake exchange with an amateurish website riddled with spelling errors. The scam market is characterized by high profits, no taxes, minimal effort and zero risk and by the end of 2020 we predict it will have grown over twenty fold since 2017 to an annual revenue of at least 50 million US dollars.

Figure: Total Scam Revenue Per Year (Until the First Half of 2020, Excluding Ponzi Schemes)

The growth of the scams market seems to come with an increase in professionalism and aggressiveness. What started with mostly bulk sent sextortion emails and malware has now evolved into fake enterprises offering round the clock “customer support” with dozens of websites and thousands of fake social media accounts used for promotion. The most prominent type of scam at the moment is the Giveaway, which features either a celebrity like Elon Musk or a well known exchange and can net between a few thousand and 300,000 US dollars depending on the skill and effort put in by the scammers. The change in method and the increase in quality and scale suggests that entire professional teams are now behind some of the most successful ones and it is just a matter of time before they start using deepfakes, a technique that will surely revolutionize the scam market.

Figure: Total Revenue Giveaway vs Reported Scams (Until the First Half of 2020)

The market is rapidly growing and its impact on people’s lives is becoming more substantial. Should the victims have known better? Probably, but scams are the first introduction to blockchain for many and this is where the community fails the most: local regulation and enforcement will do little to stop scammers, so the responsibility lies with the community. Established blockchain companies play a big role in normalizing the idea of free money through giveaways and should be more thoughtful about what message they carry outwards and stop with these kinds of promotions altogether. As the gateway between fiat and cryptocurrencies, exchanges especially should be actively educating newcomers on the dangers in blockchain and prevent them from sending anything to known or suspected scam addresses.

Over the past few weeks we have been able to trace the origins and destination of scam proceeds to some of the top exchanges, gambling sites and payment providers who either willingly or, more likely, unknowingly participate in these crimes. One thing is very clear: whatever is being done right now to stop these criminals is not enough and if we don’t act as a community, the reputation of blockchain might not be able to recover in the long run.

Our data is still incomplete and we have a lot more work to do. You can help by reporting any scam you come across directly on our website. Some of our readers have suggested that the total revenue may have been propped up by scammers to appear legitimate, but we have found no evidence for these claims and it is also unlikely that the victims of scams are experienced enough to use an explorer for verification.

An Example of an Image Used by Scammers to Deceive Their Victims



Whale Alert

The worlds largest blockchain tracking and analytics provider.