Tuesday, October 19, 2021

Bitcoin movie scam targets users

By Shaan Patel , CNN Written by

It was intended to be a money-making opportunity.

Cult cryptocurrency Bitcoin announced its very own movie, released on Valentine’s Day. In the flick, a user is trapped in a bank and forced to guess the correct cryptocurrency.

But it ended up being an opportunity for scammers to make money for themselves instead.

Pranksters stole login details from the Bitcoin Movie site, and exploited a security vulnerability in it to conduct a financial scam.

This con has been going on since late Thursday, when Bitcoins Movie announced it was going to be a money-making platform.

The site then became flooded with visitors, who were offered a chance to buy rare coins for their own amounts.

Once the buy-in reached a certain amount, however, the site defaulted to two digits instead of digits. When the two digit was voided, visitors were told to visit a site that gave them the money. The order would be tallied, and will be taken when the order is paid in full, they were told.

While there were other valid sites where users could have logged on for free, there were also websites offering vast sums of money – up to 30 times the amount of the order.

The scam’s success was apparent, as the Bitcoin Movie website posted from $500 to $3,099.

While the director of the film, one TCoplex user, said the scam was simple – it was simply instructing the user to give a binary number – it did come as a surprise to the company, according to CEO Gordon Ma.

“An outrageous amount of payments went through (from) a few different sites (where) people were just duped,” Ma told CNN on Friday. “We found out when the total fees topped $10,000.”

The company says some 45,000 users have been affected.

“They’ve made a mistake and they’re trying to resolve it,” Ma told CNN. “We’re working with security to fix it as well.”

The Payments Coalition, an association of financial institutions, has already gone public with its safety concerns over Bitcoin.

On Friday, CEO Scott Miller warned the cryptocurrency service could be vulnerable.

“Over the last two years we’ve seen numerous security breaches related to Bitcoin,” he said. “While not posing a direct threat to consumers, it has been noted that Bitcoin carries increased risks for third-party partners of its underlying software platform, namely payment platforms.

“As concerns around cryptocurrencies evolve, it is critical for all payment participants to fully understand the potential risks of the ecosystem.”

Payment service Coinbase has also highlighted some of the risks associated with Bitcoin – for consumers.

“Buying Bitcoin is highly speculative and carries potential risks for consumers. The magnitude of these risks can greatly vary by the size of your wallet, the amount of cash you bring with you, and your level of skill at cryptocurrency trading,” the company said in a statement to CNN.

Cryptocurrency expert Ned Richards says scammers can quickly adopt new technology – after all, money laundering and hacking were among the most common scams in the 1990s.

“It could happen with pretty much any technology and be relatively simple. People are starting to recognize that with how they purchase cryptocurrency, they need to take it a lot more seriously,” Richards, CEO of Massachusetts Blockchain Group, told CNN.

While both Ma and Richards point out that Bitcoin needs to be more responsibly policed, they stress that Bitcoin users need to take responsibility for their own financial security.

“You need to be aware of what goes into your wallet … [b]ut it’s not for everybody. This was a free scheme. It was free and available,” Richards said.

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