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With bitcoin going through a long bull run, scammers and scammers have been on hand to exploit a general fear of losing (FOMO). Many early bitcoin users became multimillionaires simply by holding the digital asset.
New scam tactic
As a result, many bitcoin investment scams have arisen and millions of dollars have been lost to the scammers. Although some education and awareness campaigns have helped to expose some of the sinister scam tactics, it seems that new and more brazen ones are emerging.
One of these new tactics implies that investors can buy or own shares of Bitcoin itself, as if it were a company. This tactic is part, for example, of an elaborate plot used by individuals behind an operation called Bitcoin Inc, to persuade ignorant investors to trade the operation for “the real Bitcoin”.
In a presentation, the shareholders of “Bitcoin Inc” describe bitcoin as the creation of a private company born around the year 2010. The timing of the emergence of Bitcoin Inc seems to give the impression that the organization is probably behind the issuing bitcoin itself.
Using half-truths and outright false claims, the scammers’ webpage claims that some investors already own bitcoin stock via the full company shares of Bitcoin Inc after buying them in 2010. According to the information on the site, there is a cap of “21 million BTC and 1000 Bitcoin Inc’s full corporate stock cap.” A full corporate share is “equivalent” to 10 BTC.
Now, in order to attract ignorant investors, the website implies that anyone who has bought and held a full stake in the company since 2010 now has an investment portfolio worth $ 210,000. This is because BTC rose from the price of $ 0.10 when the full company shares would be issued in 2010.
Indeed, BTC has been the best performing asset over the past decade, but it certainly hasn’t been issued by any single entity as Bitcoin Inc operators are suggesting. Rather, the creation and issuance of bitcoin is due to a complex and decentralized technology.
So while Bitcoin Inc correctly points to 21 million as a fixed maximum of BTC, the organization fails to inform potential investors that nearly 18.5 million bitcoins have been issued so far. The latest BTC will only be issued in the year 2140, yet Bitcoin Inc implies throughout its presentation 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 out of the $ 19,500 resistance level. Interestingly, the Bitcoin Inc site falsely implies that BTC has an expected price of $ 21,000, which would be a new all-time high if 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 levels of ignorance of non-bitcoiners so that they are not overly concerned about the potential downside of using lies. Instead, scammers know that using the get-rich-quick appeal is often enough to fool even the most rational investors.
Furthermore, an apparent reluctance to learn the basics of bitcoin (by non-bitcoiners), as well as an inability to follow trends in crypto markets, usually gives scammers new victims. Perhaps the least known tactic employed by scammers is to attempt to present themselves as a group of benign philanthropists.
Purchase of USDC Stablecoin
By copying this strategy, Bitcoin Inc offers an opportunity to investors who “got lost” when its full company shares were first sold: Bitcoin Inc states:
The full corporate stock of Bitcoin Inc. was acquired a long time ago, with shareholders enjoying the benefits and dividends of owning the shares of a successful company. Bitcoin Inc. has secured an all-shareholder agreement through which it now generously offers the public fractionally equivalent company shares in honor of Bitcoin Inc.’s 10th anniversary.
Using a very inconsistent explanation, Bitcoin Inc assures investors who got lost in 2010 that they can now make amends by “withholding any amount of USDCX in their 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 wish to purchase to an Ethereum contract address, but there is a caveat.
The statement explains that “in order to maintain the integrity of Bitcoin Inc’s corporate stock,” the request for USDCX shares will be processed manually. The statement adds:
Once the transaction is verified, the corresponding USDCX will be sent directly to your wallet from the USDCX Ethereum contract address.
Only when the process is complete do you become “proud owners of USDCX and co-owners 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 as there is no brand or company behind the Bitcoin brand that can protect it from scammers.
What do you think of Bitcoin Inc’s fictitious “fractional share” offering? Share your views in the comments section below.
Image credits: Shutterstock, Pixabay, Wiki Commons
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