Scam Exposed: Crypto Media Outlets Targeted by Fraud Ring

Cointelegraph has uncovered a profit sharing scheme where self-proclaimed “hackers” lure unsuspecting clients to sell their coins after reading promotional articles purportedly posted on crypto media outlets such as NewsBTC and CryptoCoinsNews.

As the old adage goes, when something is too good to be true, it probably is. This appears to be the case with at least one website, which claims to purchase bitcoins directly from clients via hacked PayPal accounts at above market value at ~US$259 compared to the current market price of ~US$236.

btcgoi homepage screen shot

Speaking to an online customer service representative by the name of “Elizabeth A.,” I was told that the reason the website can buy at above market price is because they are running “a promotional offer” that is “available only for few days.” Due to the current low price of bitcoin, the representative explained that they can “afford to pay 10 % more than market value … in order to satisfy customers.”

Interestingly enough, Elizabeth replied that they nevertheless “will buy bitcoins almost all the time... only this period we offer a good price in order to attract customers till march,” after which, I was asked if I would like to sell some coins.

Apparently, the scheme operates by paying out customers for their coins (from hacked PayPal accounts) above market price for small amounts at first. Then, after the customer sees that these transactions are successful, they will sell larger bitcoin amounts, after which the payments will no longer go through and the customer is left with no bitcoins and no money.

This was uncovered after we received a press release earlier this month, which raised a lot of red flags. So we decided to dig deeper and got in touch with one of the people behind the service, known only by the skype name SterBlich.

Eyeing a potentially large windfall, SterBlich was eager to divulge all of the details to Cointelegraph regarding how the scheme works offering a 50/50 profit split with the “partner” media outlet.

SterBlich listed a few media partners that his group worked with already, specifically:

  • CryptoCoinsNews (CCN)
  • NewsBTC
  • Bitcoinist

SterBlich touted that CCN and NewsBTC allegedly received 75 and 35 BTC, within 24 hours from the scheme, respectively. When asked whether CryptoCoinsNews did in fact cooperate with SterBlich in the scheme, CCN Director David Parker replied:

"[SterBlich] published a sponsored story that he paid for with a PayPal account he had hacke