Bitcoin Blackmailing Scams Targeting "Unfaithful" Men Reported By US Federal Trade Commission (FTC)

  • A new blackmailing bitcoin scam targeting "unfaithful" men has surfaced, the US Federal Trade Commission (FTC) reported.
  • The fraudsters claim they "know about the secret you are keeping from your wife" and threaten to tell everyone if the victim does not pay them a "$8600 confidentiality fee."

The US Federal Trade Commission (FTC), an independent government agency that focuses on consumer protection, recently issued a warning against “bitcoin blackmailing scams.” The FTC’s Division of Consumer and Business Education reported on August 21st that they’ve discovered a new bitcoin scam that targets men.

The consumer protection notice explained that scammers are sending threatening letters to men in which they demand payments in Bitcoin (BTC) “in exchange for keeping quiet about alleged affairs.” In their intimidating messages, the scammers also tell their victims how to make payments in the pseudonymous cryptocurrency.

$8,600 Confidentiality Fee

According to the FTC, many users have become the target of these exploitative letters and it considers them to be a “criminal extortion attempt to separate people from from their money.” The consumer protection agency also shared what appears to be an excerpt from a bitcoin blackmailing scam letter, which threatens its recipients:

“I know about the secret you are keeping from your wife and everyone else. You can ignore this letter, or pay me a $8600 confidentiality fee in Bitcoin”.

Bitcoin Scam Email

"Criminal Extortion", "Classical Signs Of A Scam"

These types of messages are “classical signs of scam”, according to the FTC, as they use “threats, intimidation, and high-pressure tactics.” The agency has also instructed people who receive such messages, or know someone who has, to immediately report it to the Federal Bureau of Investigations (FBI) and their police department.

Notably, a similar scam was reported in the US state of Hawaii in which scammers pose as customer service representatives from local utility and energy companies such as Hawaii Electric Light and Maui Electric. The fraudsters then claim that the user has not paid their outstanding electricity bill and their power will be cut off if the overdue charges are not paid immediately using bitcoin.

This crypto scam also uses the same high-pressure tactics in which the scammer demands that the money be paid “right away” or promptly. They also threaten their victims in many cases by telling them that they will be arrested if they don’t make the payment. Per the FTC, government agencies and debt collectors are not allowed to threaten anyone.

Hundreds Of Fraudulent And Threatening Calls, Emails

Despite clear warnings from authorities, it appears that many people have still become victims of these malicious scams. Hawaii’s local television network Khon 2 reported that hundreds of fraudulent calls had been made during the last month and that three businesses even paid hundreds of dollars to the scammers using Bitcoin ATM machines.

Shannon Tangonan, communications director at Hawaiian Electric, revealed that,

“They [electricity bills] weren’t even overdue, but the scammers sounded so convincing that these business owners were willing to pay. They actually went to a bitcoin machine as directed by these scammers and fed cash into the machines.”

Shannon Tangonan

As CryptoGlobe reported in July, a blackmailing scam targeting porn viewers had surfaced. The scammers had been attempting to extort $1,900 in bitcoin from their victims by telling them that they would share footage of them watching porn with everyone in the their contacts list if they did not pay up.

These bad actors claimed in their emails to users that they had gained access to the their private information and had recorded them viewing porn by using malware. However, Cornell professor Emin Gün Sirer said it was a “bluff” and told everyone targeted by the scam to “be careful out there, never pay, never negotiate.”

Kraken OTC Head Says It’s Too Early to Call Bitcoin a 'Safe Haven' Asset

Michael LaVere
  • Kraken head of OTC trading Nelson Minier says it's too early to call bitcoin a "safe haven" asset.
  • Compares the current atmosphere of crypto trading to how Wall Street used to be. 

Nelson Minier, head of over-the-counter (OTC) trading at crypto exchange Kraken, says that it is too early to call bitcoin a “safe haven” asset, despite the cryptocurrency gaining popularity in that regard. 

Too Early for Save Haven Status

In an interview with Nasdaq TradeTalks, Minier compared the current state of bitcoin and crypto-assets trading to how Wall Street used to operate in the past. 

According to Minier, 

Wall Street ain't what it used to be. The first 15 years I was on Wall Street, it was fun. I was very fortunate. I started in the CDS market which feels a lot like crypto. Here you have a lot of financial innovation, a lot of trading. It feels very much like that...there's a lot of energy and enthusiasm about this progress and where it's going.

Bitcoin has been gaining popularity as a so-called “safe haven” asset. According to the growing belief among analysts and investors, BTC is an attractive alternative to fiat and the traditional stock markets as a hedge against economic downturn. 

However, Minier believes it’s too early to label bitcoin as a safe haven, given the high price volatility. 

He continued, 

So, I’m not so sure that it’s a safe haven asset yet, but I do think that it’s starting to act like one. I think that people are starting to portfolio manage, are starting to come in slowly. And when the market is getting shaky you saw Bitcoin rise, I mean, you wouldn’t see that before, it was trading like a risky asset.

Despite calling bitcoin's safe haven status premature, Minier admitted that “we're heading that way for sure.”