Scamming has become common in the cryptocurrency market. These activities are not always about stealing coins – sometimes they aim to manipulate the market prices.
In a recent such attempt, a bogus press invitation was sent to the US media houses claiming that the Hong Kong Monetary Authority (HKMA) and People’s Bank of China (PBOC) have joined hands to introduce new measures to crack down on Bitcoin trading in mainland China as well as independently governed Hong Kong, according to the South China Morning Post.
The email claimed that on the 14th February, the HKMA and the PBOC will announce new anti-money laundering regulations in Beijing. The email also mentioned that the Chinese central bank deputy governor Pan Gongsheng will officiate the announcement.
South China Morning Post quoted a section of the email: “[to extend the crackdown to] all virtual currency services and activities of both individuals and business including market makers, mining operators, trading platforms, and wallets.”
The monetary authorities of both Hong Kong and China denied any such event taking place.
The email was sent from the PBOC domain, ending with ‘@pbc.gov.cn’, in order to deceive the recipients. The sent emails even attached a registration form for journalists for the February 14th briefing.
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The owner of the compromised mailbox was identified as an official working at the Hefei branch of the Chinese central bank in Anhui province. He denied any knowledge of the activity from his account and added that his email had been hacked.
According to an analyst, this bogus email is an attempt by traders to spread rumors in the market and thus profit from declining Bitcoin prices in the futures market.
This is not the first time that scamsters have tried to spread fake news and manipulate cryptocurrency prices. Last year, the price of Ethereum dipped after rumors of the demise of its founder, Vitalik Buterin. Also, following rumors of Amazon accepting Bitcoin, the prices of the digital coin spiked last year.
According to Leonhard Weese, President of the Hong Kong Bitcoin Association, the scammers were trying to spread rumors and panic among the traders in the hope of manipulating prices.
The South China Morning Post quoted Mr. Weese: “I’m not sure it always works, but especially when they can make use of mistranslations and ambiguities, I’m sure they can spread a bit of panic…[the ruse is effective] especially in an immature market with a very low barrier to entry, and where there are many day traders who might be manipulated that way.”
Unlike the authorities in mainland China, Hong Kong is very lenient on cryptocurrencies. It is becoming an Asian hub for blockchain firms, including many cryptocurrency exchanges. However, the Hong Kong regulator is constantly trying to spread awareness among its citizens about the risks associated with cryptocurrency investments. It has even started a public campaign to educate people about cryptocurrencies and the investment risks.