As cryptocurrency use rises, so do the scams

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As cryptocurrency use rises, so do the scams

This series features articles written by KC University students participating in the Korea JoongAng Daily’s internship program. All articles were written under the guidance of our staff reporters. -Ed.

In recent years, the cryptocurrency market has shown promising numbers for miners across the globe, leading more investors to jump into digital currency to the point where some PC cafes are closing for a few hours to run personal mines.

Cryptocurrency enthusiasts are hoarding computer parts on the local market in hopes of making considerable profits in digital currencies. This has resulted in component prices skyrocketing due to demand and markets running out of stock. The regular consumer will be hard-pressed to find computer parts at the moment, so graphics card manufacturers are contemplating whether they should make a whole new different component for mining out of fear of losing potential customers.

As cryptocurrencies become more popular and profitable, news of illegal acts are rising around the world. Most recently on July 11, the founder of Mt. Gox, once the world’s largest bitcoin exchange, was charged with embezzlement and manipulation of customers’ bitcoins after 341 million yen ($3 million) worth of bitcoin was lost.

Novices of cryptocurrencies often start by buying premade “bitcoin mining rigs” due to lack of IT knowledge, and this is where many get caught up in scams. In Korea, there have been reports of people getting half-built rigs or nothing at all after placing orders for them. At the end of May, police in Daejeon arrested a 22-year-old on the suspicion of fraud and scamming 35 people out of nearly 47.3 million won ($41,900) by selling them faulty bitcoin mining rigs and other goods.

But on top of these old-school con artist tactics, digital currencies are also prone to hacks and denial of service attacks, and some smaller cryptocurrency operators can get away with embezzling customers’ money.

Ethereum, another form of cryptocurrency that is blooming in the market, second to the renowned bitcoin, has suffered from hacks. Although Ethereum’s price is nowhere near where bitcoin’s is at a tenth of the value of bitcoin, its price is on a constant rise compared to its initial phase. As cryptocurrency gains a foothold, wannabe cybercriminals are trying to find ways to make easy cash at the expense of others. These individuals plant malware into other computers and use them to essentially build a personal rig, and what was once a handy tool to quickly get your mining rig up and running can quickly become a botnet that eats away at your computer’s resources.

The malware is spreading through installers for torrent clients used to share large amounts of data online. Hackers recently pulled of a bold move in broad daylight by infecting an installer of the popular torrent client uTorrent with mining malware called “Epic Scale.” The installer looks like the official one offered by uTorrent, and many antivirus programs can’t detect the malware because of how recent the virus is. This malware can have a heavy impact on infected devices and lead to heavy screen tearing and long delays, not to mention the electricity bill that the machines run up.

The staff at uTorrent have yet to fully address the situation as they claim they have never broken the terms and services of their program.

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