Bitcoin Blackmail Scam Is On The Rise: Watch Out

One of the greatest strengths of bitcoin and the cryptocurrency industry is the fact that transactions can be conducted quickly and anonymously. But this is also a weakness, at least in a particular light. While users feel that their security and privacy are greater when transacting on cryptocurrency exchanges than they otherwise would be in the traditional banking world, some nefarious actors have taken advantage of that anonymity. (See also: Beware of these Five Bitcoin Scams.)

This has taken several forms, including periodic hacks and thefts which can be very difficult to trace. Now, a new scam seems to be taking hold: as part of this blackmail operation, wealthy men from the U.S. have been receiving demands for bitcoin ransoms lest the blackmailer reveal their past "infidelity."

Bitcoin Ransom

A recent report by Coindoo describes one victim of the blackmail scam, Dave Eargle. He received a letter suggesting that he had cheated on his wife, indicating that if he wants the writer to "destroy the evidence and leave [him] alone forever then send $2,000 in BITCOIN."

The letter had Eargle in "a bit of a fluster," despite the author's unfounded claims of infidelity. Regardless, the assistant professor at the University of Colorado's Leeds School of Business couldn't help but be targeted, perhaps because of his position and status.

Eargle notified the police of the blackmail letter and shared his experience online. It was then that he discovered that other individuals had been targeted in similar blackmail attempts. The letters even include instructions on how to buy and transfer bitcoin.

Letters Sent From All Across the U.S.

Based on responses that Eargle received to his blog post, he determined that the blackmail letters could be traced to numerous locations across the U.S. Still, they all shared the same content and threatening messages. Eargle believes the letters are still being sent, with some newer versions demanding as much as $8,000 in bitcoin to keep quiet.

Patrick Wyman, a supervisory special agent for the FBI's money laundering unit, indicated that "the amount of money is such that it's not so much that someone might be willing to just pay that to make it go away. They're hoping that they might get lucky with someone who actually...[has] some infidelity there. And if they hit that target, that's a person who's probably willing to pay." The FBI is reportedly investigating the scam at this time.

In the meantime, Wyman suggests that recipients of new letters should not pay the ransom and should instead alert the police. "If you're cautious about where you're sharing your personal information...very specific details about yourself or your family...that is going to help protect you from maybe this sort of a scam," he suggested.

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