Fake Cryptocurrency Provider Shut Down Sparking Fears of Fraud

How safe is your cryptocurrency?

Investment in cryptocurrency has boomed in the last year. This is due, in no small part, to the almost vertical rise in the price of the Bitcoin. With the other major currency, Ethereum, also continuing to rise in value people want to get on board while the going is good. There is just one problem when there is money to be made, there are people who want to take it from you.

Personally, I’m waiting for an e-mail from a Nigerian prince telling me he has $19,000,000 in Bitcoin he’s willing to share with me.

China might be seeing the writing on the wall with cryptocurrencies with reports suggesting their intention to ban it in the near future.

The Swiss financial authority has confirmed that they shut down a website specifically trading in cryptocurrencies reports Reuters. The website was selling the currency with one slight problem, it wasn’t actually selling anything. It was taking the consumers money, posting the money on their account, however, none of the currency was real.

It is the problem with an online currency, how do you prove its existence?

How many have been affected by this?

Fortunately, not too many. Although the Swiss Financial Authority has said it is investigating a further 12 companies. The specific company in question ‘QUID PRO QUO’ had apparently traded over $4m of Bitcoin before being closed. So we are talking quite significant amounts of money here.

Personally, the thought of heavy investment in an online currency would terrify me. Most standard currencies have something backing it, be it a government or gold. I am still yet to be convinced of the value of a currency based solely on its existence.

In addition to this, reports of its misuse continue to grow. We reported only this week how The Pirate Bay was hijacking visitors PCs for their own cryptocurrency mining gains.

One piece of advice might be to use reputable traders, however, as can be read here, even they have been victims of hacking.

I personally believe the Bitcoin bubble will burst, and burst hard. No industry or currency can sustain this growth with a major dip. From those of us who don’t mine or didn’t invest, we can hopefully at least look forward to eBay getting flooded with 2nd hand high-end graphics cards.