With bitcoin going through an extended bull-run, scammers and con artists have been on hand to exploit a general fear of missing out (FOMO). Many early adopters of bitcoin became multi-millionaires by simply holding the digital asset.
New Scam Tactic
Consequently, many bitcoin investment scams have sprung up and millions of dollars have been lost to fraudsters. Although some education and awareness campaigns have helped to expose some of the sinister scam tactics, it appears new and more brazen ones are emerging.
One such new tactic implies that investors can buy or own shares in Bitcoin itself, as if it was a corporation. This tactic is for example part of an elaborate plot used by individuals behind an operation called Bitcoin Inc, to con ignorant investors into mistaking the operation for “the real Bitcoin”.
In a presentation, the shareholders of “Bitcoin Inc” depict bitcoin as the creation of a privately owned company that came into existence around the year 2010. The timing of Bitcoin Inc’s emergence appears to give the impression that the organisation is likely behind the issuance of bitcoin itself.
Using half-truths and outright false claims, the scammers’ webpage says some investors already hold bitcoin shares through Bitcoin Inc’s full corporate shares after buying these in 2010. According to information on the site, there is a “21 million BTC maximum limit and 1000 Bitcoin Inc full corporate shares maximum limit.” One full corporate share is “equivalent” to 10 BTC.
Now in order to entice ignorant investors, the website implies that anyone who bought and has held on to one full corporate share since 2010, now has an investment portfolio valued at $210,000. This is because BTC has since risen from the price of $0.10 when the full corporate shares were supposedly issued in 2010.
Indeed, BTC has been the best performing asset in the past decade but certainly, it was not issued by any single entity as the operators of Bitcoin Inc are insinuating. Rather, the creation and issuance of bitcoins are down to a complex and decentralized technology.
So while Bitcoin Inc correctly states 21 million as the fixed maximum of BTC, the organisation fails to inform potential investors that nearly 18,5 million bitcoins have been issued so far. The very last BTC will only be issued in the year 2140, yet Bitcoin Inc implies throughout its pitch that 21 million coins are already in circulation.
Meanwhile, at the time of writing, BTC is trading at just under $18,000 but is struggling to break past the $19,500 resistance level. Interestingly, the Bitcoin Inc site falsely implies that BTC has a projected price of $21,000, which would be a new all-time high if it were true.
Lies and Half-Truths
Normally this use of false information alone should be enough to turn investors away. Typical bitcoin scammers are aware of the general ignorance levels of non-bitcoiners such that they are not overly worried about the potential downside of using lies. Instead, the scammers know that using the appeal of getting rich quickly is often enough to hoodwink even the most rational investors.
Furthermore, an apparent reluctance to learn the basics about bitcoin (by non-bitcoiners), as well as the failure to follow trends in the crypto markets, usually gifts scammers with new victims. Perhaps the least known tactic employed by scammers is the attempt to cast themselves as a group of benign philanthropists.
Buying USDC Stablecoin
Copying this strategy, Bitcoin Inc is giving an opportunity to investors that “missed out” when its full corporate shares were supposedly sold for the first time: Bitcoin Inc says:
The full corporate shares of Bitcoin Inc. were purchased long ago, with the shareholders enjoying the benefits and dividends that come with owning the shares of a successful corporation. Bitcoin Inc. has secured an agreement with all shareholders through which they are now generously offering fractionally equivalent corporate shares to the public in honour of Bitcoin Inc.’s 10-year anniversary.
Using a very incoherent explanation, Bitcoin Inc assures investors who missed out in 2010 that they can now make amends by “holding any amount of USDCX in your cryptocurrency wallet.”
To do this, the website then goes for the kill. An investor simply has to transfer USDC stablecoins equivalent to the USDCX “fractional shares” they want to buy to an ethereum contract address, but there is a caveat.
The statement explains that “in order to maintain the integrity of the Bitcoin Inc corporate shares,” the request for the USDCX shares will be processed manually. The statement adds:
Once we verify the transaction, the corresponding USDCX will be sent directly to your wallet from the USDCX Ethereum contract address.
Only when the process is complete does one become a “proud owner of USDCX and a co-owner of the official Bitcoin Inc.!” But nothing stops the scammer from doing the same thing again with another Bitcoin-like website and domain, such as “Bitcoin Ltd.” Bitcoin is perfectly suited for scammers in that there is no trademark or corporation behind the Bitcoin brand who can protect it from scammers.
What do you think of Bitcoin Inc’s fictional “fractional share” offer? Share your views in the comments section below.
Image Credits: Shutterstock, Pixabay, Wiki Commons
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