Crypto Scams Are On The Rise: Can They Affect The BTC Price?

There is some creepy activity peeking amid the COVID-19 pandemic, the latest crypto news show. Bolstered by the new virus, the Bitcoin price scams continue to be rampant in the cryptocurrency world. We can literally see everything from malware to fake investment programs and even fake donations to health organizations. In times when crypto scams are on the rise, many people are wondering if they could take a toll on the Bitcoin (BTC) price.

One of the most prominent scams in the industry, PlusToken, has come under the spotlight again recently after some rumors emerged, showing that the March crash was caused by its operators selling their stolen Bitcoin (BTC).

Research by Chainalysis confirmed that crypto scams on the rise – but said that PlusToken did not cause the “Black Thursday” sell-off on the markets on March 12. A recent webinar by Chainalysis sought to bring clarity to the impact of the COVID-19 pandemic on cryptocurrency markets by analyzing key points in on-chain data such as exchange inflow and more.

Philip Gradwell, who is the chief economist at Chainalysis, spoke during the presentation and addressed a somewhat common opinion that the crypto market crash which happened March 12 to March 13 was caused by PlusToken – and it liquidated the Bitcoin acquired through the Ponzi scheme which came to around $2.9 million, according to the firm. The Bitcoin scam news featured Gradwell stating:

“We can also dispel another theory that has been going around, that PlusToken […] selling triggered the price decline. We actually don’t think that’s the case because PlusToken had largely cashed out before early March.”

Now that crypto scams are on the rise, we can see that data from Chainalysis indicates that PlusToken movements to exchanges decreased severely before the crash. This again shows that funds were already cashed out.

So, can BTC decline again because of the increase of crypto scams worldwide?

From fake donation campaigns for the World Health Organization (WHO) to fraudsters impersonating officials from these agencies, the number of crypto scams is on the rise. More than ever before, crypto holders need to be careful and wary of them. According to the FBI and its latest press release, there is a potential increase of “crypto related fraud schemes” during this pandemic:

“There are not only numerous virtual asset service providers online but also thousands of cryptocurrency kiosks located throughout the world which are exploited by criminals to facilitate their schemes. Many traditional financial crimes and money laundering schemes are now orchestrated via cryptocurrencies.”