CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 84% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.

Scan to Download iOS&Android APP

Where can you report crypto scammers? Chainabuse

By Monte Stewart


Updated

Share this article

Subscribe to Weekly Highlights

The major market events for the week ahead right in your inbox. Subscribe
A person playing a magic trick with a bitcoin
Chainabuse protects traders and institutions against cryptocurrency scams. - Photo: Shutterstock

A new free service, known as Chainabuse, allows individual traders and financial institutions to report cryptocurrency-related hacks, scams, and other illicit activity via a website.

Site users can also view reports on potential scammers, reducing their chances of being victimized by potential hacks, phishing, fake cryptocurrency investment projects known as rug pulls, and other crypto-related cybercrime.

What is your sentiment on BTC/USD?

23401.50
Bullish
or
Bearish
Vote to see Traders sentiment!

Binance price in USD

Created by TRM Labs

Chainabuse was created by US-based TRM Labs, which provides security services for law enforcement agencies, cryptocurrency exchanges – including Binance and FTX – decentralized finance (DeFi) platforms, and regulators. TRM contends that Chainabuse will enable investigations into crypto-related fraud to be launched more quickly.

“Really, our main goal is to find a way where individuals, if they've been scammed, can report (the scam) and hopefully prevent the next person from falling into that same trap,”  said Joe McGill, who is responsible for Chainabuse product strategy, in an exclusive interview with Capital.com.

The cryptocurrency market cap peaked at $3trn (£2.37trn) in 2021 despite intense volatility. As adoption has increased, so have scams target crypto enthusiasts. According to TRM, warnings of scams are often reported on social media sites such as Twitter or Discord, but the posts can be difficult to validate, consolidate or track over time.

The idea for Chainabuse was hatched in 2021. McGill, a former US Secret Service and Postal investigator based in Memphis, indicated that Chainabuse was launched based on feedback from TRM partners and clients.

Heard from victims

Joe McGillJoe McGill, TRM Labs (Photo courtesy of TRM Labs)

“What we're hearing from regulators and some of our cryptocurrency partners and then just victims is that there needs to be some type of self-regulated opportunity where individuals can report scams or hacks or exploits so other people are aware about what's going on in cryptocurrency land,” said McGill.

“And so that's kind of what we decided to come up with, and we are excited to roll out Chainabuse, which is, a multi-chain reporting tool with multiple blockchains.

“Our strategy and rollout plan is to, hopefully, continue to create some great network effects and have community collaboration to work together to in identify any type of malicious activity that's happening on the blockchain.”

McGill said more than 100 potential scams were reported after Chainabuse launched. Chainabuse coverage includes the Solana, Bitcoin, Ethereum, Binance, Aave, Hedera, and Tron blockchains, as well as their associated digital coins, the Binance cryptocurrency exchange, the OpenSea non-fungible token (NFT) marketplace, wallet identity service provider Civic, and the Circle US dollar coin, which is pegged to the greenback.

“The safety and security of Web3 users is our top priority,” said Aave CEO Stani Kulechov in a news release. “Working with TRM Labs will enable us to reduce scams and hacks, which have cost people millions of dollars.”

Chainabuse will allow Aave to work with industry partners on protecting the next million participants in DeFi and Web3, he added.

Natural Gas

2.41 Price
-2.390% 1D Chg, %
Long position overnight fee -0.1138%
Short position overnight fee 0.0796%
Overnight fee time 22:00 (UTC)
Spread 0.005

BTC/USD

23,401.50 Price
-0.050% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 60.00

US100

12,566.80 Price
-0.450% 1D Chg, %
Long position overnight fee -0.0183%
Short position overnight fee 0.0071%
Overnight fee time 22:00 (UTC)
Spread 3.0

XRP/USD

0.41 Price
-0.250% 1D Chg, %
Long position overnight fee -0.0500%
Short position overnight fee 0.0140%
Overnight fee time 22:00 (UTC)
Spread 0.00330

Hedera price in USD

Community involvement 

The service seeks to get the crypto community more involved in preventing scams.

“One thing that we've really seen that's exciting about crypto, which I think is very different from any other sector out there, is that when there's a hack or a scam or whatever it might be, the crypto community is really great at, together, identifying any of the information associated with the scammers and just collaborating,” said McGill.

“There's a really great sense of community in the crypto space. And that's what we're trying to hone in on with Chainabuse… Be that place where individuals can report these things that could affect basic financial services and give opportunity for people to collaborate and identify these scammers.”

Chainabuse allows users to see info on specific types of hacks and scams and filter information concerning a specific blockchain. Had Chainabuse been available earlier, said McGill, it could have created awareness of scams surrounding Ukraine crypto-related fundraising efforts and a scam giveaway offer allegedly tied to Tesla founder Elon Musk.

On Monday, the Chainabuse website pointed to 36 potential Ukraine donation scams.

Bad actors get lazy

McGill said it’s safe to say that Ukraine-related scams have resulted in the loss of thousands of dollars.

He noted that many bad actors are using the same websites repeatedly and just recycling the domain (i.e. website names), and scams contain similar language in many cases. TRM hopes Chainabuse can help traders spot such trends and guard themselves accordingly.

“Sometimes (bad actors) are lazy to the point where they’re not creating new crypto addresses, so we’re hoping to create good muscle memory where individuals can check to see if these scams have been reported,” said McGill.

Chainabuse does not report illicit activity to law enforcement agencies, but recommends that victims do so.

 

Related reading

Rate this article

Share this article

The difference between trading assets and CFDs
The main difference between CFD trading and trading assets, such as commodities and stocks, is that you don’t own the underlying asset when you trade on a CFD.
You can still benefit if the market moves in your favour, or make a loss if it moves against you. However, with traditional trading you enter a contract to exchange the legal ownership of the individual shares or the commodities for money, and you own this until you sell it again.
CFDs are leveraged products, which means that you only need to deposit a percentage of the full value of the CFD trade in order to open a position. But with traditional trading, you buy the assets for the full amount. In the UK, there is no stamp duty on CFD trading, but there is when you buy stocks, for example.
CFDs attract overnight costs to hold the trades (unless you use 1-1 leverage), which makes them more suited to short-term trading opportunities. Stocks and commodities are more normally bought and held for longer. You might also pay a broker commission or fees when buying and selling assets direct and you’d need somewhere to store them safely.
Capital Com is an execution-only service provider. The material provided on this website is for information purposes only and should not be understood as an investment advice. Any opinion that may be provided on this page does not constitute a recommendation by Capital Com or its agents. We do not make any representations or warranty on the accuracy or completeness of the information that is provided on this page. If you rely on the information on this page then you do so entirely on your own risk.

Latest Cryptocurrency news

Still looking for a broker you can trust?

Join the 480.000+ traders worldwide that chose to trade with Capital.com

1. Create & verify your account 2. Make your first deposit 3. You’re all set. Start trading