Analyzing the Bitcoin Ponzi Scheme Ecosystem

Abstract

This paper analyzes the supply and demand for Bitcoinbased Ponzi schemes. There are a variety of these types of scams: from long cons such as Bitcoin Savings & Loans to overnight doubling schemes that do not take off. We investigate what makes some Ponzi schemes successful and others less so. By scouring 11 424 threads on bitcointalk. org, we identify 1 780 distinct scams. Of these, half lasted a week or less. Using survival analysis, we identify factors that affect scam persistence. One approach that appears to elongate the life of the scam is when the scammer interacts a lot with their victims, such as by posting more than a quarter of the comments in the related thread. By contrast, we also find that scams are shorter-lived when the scammers register their account on the same day that they post about their scam. Surprisingly, more daily posts by victims is associated with the scam ending sooner.

Data Mining for Detecting Bitcoin Ponzi Schemes

“…Despite many victims are perfectly aware of their fraudulent nature, and of the fact that they are illegal in many countries, Bitcoin-based Ponzi schemes are proliferating. A recent study [19] inspects the posts on bitcointalk.org (a popular discussion forum on Bitcoin), finding more than 1800 Ponzi schemes from June 2011 to November 2016. Estimating the economic impact of Bitcoin-based Ponzi schemes is more difficult, due to the lack of datasets of Ponzi-related Bitcoin addresses: a conservative estimate for the period from September 2013 to September 2014 shows that Ponzi schemes operated through Bitcoin have gathered more than 7 millions USD.…”

Charting the Landscape of Online Cryptocurrency Manipulation

“…Content may change prior to final publication. [13] Telegram comprehensive pnd Mirtaheri et al [14] Telegram comprehensive pnd Hamrick et al [15] Telegram, Discord comprehensive pnd Glenski et al [16] Reddit Bitcoin, Ethereum, Monero -Kim et al [17] Forum Bitcoin, Ethereum, Ripple -Kim et al [18] Forum Bitcoin -Vasek et al [19] Forum Bitcoin Ponzi Bartoletti et al [20] Reddit, Forum Bitcoin Ponzi Linton et al [21] Forum comprehensive -…”

BlockTag: Design and Applications of a Tagging System for Blockchain Analysis

“…Organizations responsible for consumer protection, such as trade commission agencies and financial regulatory authorities, have a mandate to research and identify fraud cases involving cryptocurrencies, including unlawful initial coin offerings and Ponzi schemes. Given the popularity of Ponzi schemes in Bitcoin [28,29], we focus on this type of fraud and show how BlockTag can help analysts flag users who are likely victims or operators of such schemes.…”