Fighting Fraud in the Bitcoin Industry


Blockchain usage and applications increased exponentially in recent years and experts are also calling it to be the 4th industrial revolution. That’s pretty great! Right? But that’s not coming this easy. With more and more users and service providers there come more and more black sheep, trying to sabotage the network for their own benefits and scamming users on the network.


There have been seen some frauds that really trapped users and got them really bad damages. Some of them are,

Ponzi scheme

Ponzi scheme or more commonly pyramid scheme is one of the biggest monetary fraud schemes. It generates money for earlier investors from the later ones and the cycle goes on and on. This seems like affiliate marketing but in the end, the later investors are at a loss. To the investors, it seems like the sales or operations are making the profit but lesser they know that only the new investors are generating the funds earlier ones.

Fake ICOs

ICO or initial coin offerings are a way for companies to generate capital. With the boom of blockchain more and more companies are offering ICOs and customers can now easily back their favorite businesses. But there are fake ICO websites of fraudulent companies that look really like authentic ICOs and are looting innocent consumers.

Centra Tech, for example, was sued in the US in 2017 for lying about their team, misleading investors, and scamming them.

Exchange Scams

Despite being online there are many crypto coins run by exchanges and since there are no or fewer monitory bodies for crypto exchanges they are the best to loot people. They lure customers with their prices and profits and when they sign up to these exchanges they are left with nothing but regrets. In December 2017, there exposed a large number of such exchanges in South Korea and people were left with monetary loss only.

More disguised and almost clueless frauds are the mixture of multiple scams. Like for say, a fake ICO with a Ponzi scheme is going to damage more people and will be really hard to be found and avoided.


Companies are making the payment processing more secure, which results in fewer fraud chances and more user trust. One of such companies is CoinTandem, a subsidiary of Tech ViewOU run by Yotam Namir, Robert Provorov, providing some of the best services for crypto trades. Some of which are,

Standalone Exchange

For every transaction on the platform, customers are required to use their authenticated bitcoin wallet, making the transactions more secure and traceable.

Enhanced KYC protocol

Their enhanced KYC (know your customer protocol) ensures top-tier security. It checks and 100% clarifies who is using the system and asks for a digital signature as proof.

No Cartels

They ensure that the buyer is not buying the coins as a face for some third party and is the sole owner of the wallet they are buying in.

The first step to prevent fraud is to accept that cyber-crimes are crimes too. Guys at CoinTandem have realized this and are working with state-of-the-art fraud prevention technology and are acing it.

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