Thieves steal $2 million with pandemic essentials scam

Blockchain security firm AnChain.AI. reports that scammers appearing to sell hand sanitizer, face masks and medication have stolen $2 million in cryptocurrency from panicking consumers.

The world is shaken by the spread of Covid-19, hospitals from Europe to the US are overflowing and governments are concerned if their reserve can meet the growing demand. Unfortunately, any human tragedy opens doors for innovative scams. As the growing concern is making people increasingly scared and wary, low-budget malicious actors are looking to deceive and take advantage of the situation.

scam company

INTERPOL Secretary General Jürgen Stock commented:

Jürgen Stock

Criminals are exploiting the fear and uncertainty created by COVID-19 to prey on innocent citizens who are only looking to protect their health and that of their loved ones.

Steven Yang, marketing director at AnChain.AI, noted that some of the scams are being facilitated by cryptocurrency. His company has allegedly traced millions of dollars misappropriated crypto funds two weeks into an investigation in Asia.

AnChain.AI CEO Victor Fang experienced the scam firsthand by ordering a 100-pack of surgical masks early in February. The package has still not arrived.

Steven Yang said:

Our CEO actually ordered some face masks off of Amazon and had this done to him.

Fang brought the deception to the company’s attention, but the coronavirus scheme had been active for months. Consumers in Asia, when the epidemic first started have had to sometime pay dubious vendors with cryptocurrency to order the precious and hard-to-come-by medical supplies.

There is a pattern emerging in the coronavirus scams: the medical supply offers were published on trusted e-commerce sites such as Amazon, eBay, and social media marketplaces. Customers are then lured to messaging platforms with no third-party oversight. After the payment has been made, a fake shipping label is sent to deceive the site and the customer.

Steven Yang explained:

They launder the money through a large number of jumping and pass-through addresses, or using things like tumblers and mixers, before liquidating through exchanges.

AnChain.AI reports that so far 90% of the sham crypto transactions were tether (USDT), 5% in BTC and 2% in ether and a small amount in other cryptocurrencies.

Yang notes that the scams initially began in Southeast Asia but are not happening all over the world. However, the stolen cryptocurrencies go back to Asia.

Yang notes:

While we are still investigating this process, and the scam itself is observed worldwide, the liquidation itself is primarily going through big Asia-based exchanges.

Yang also said that the investigation may expand into other countries. As the spread of Covid-19 is still going strong in Europe, the cases of scams are not expected to lessen either. Until the investigation is able to catch the perpetrators, Yang offered some general guidelines so that people can protect themselves against the deception. He advised against buying medical supply from untrusted sources, and more importantly, from conducting deals over WhatsApp and WeChat. He also encouraged to approach crypto-first vendors with caution.

INTERPOL Chief Jürgen Stock stated:

Anyone who is thinking of buying medical supplies online should take a moment and verify that you are in fact dealing with a legitimate, reputable company, otherwise your money could be lost to unscrupulous criminals.

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