- Scammers are taking advantage of the irreversible nature of crypto transactions – Michael Cohen
- Fraudsters are switching from credit card to Bitcoin (BTC)
- Governments across the globe are working hard to tighten digital currency regulations
Bitcoin News Today – Fraudsters are taking advantage of one of the major strong points of Bitcoin, as Satoshi Nakamoto once acclaimed. Michael Cohen – the vice president of global operations at MyChargeBack – said that scammers are taking advantage of the irreversible nature of digital currency transactions.
Fraudsters Are Taking Advantage of Bitcoin’s Strength
When Satoshi first envisioned Bitcoin, one of the major selling points of the coin is that it was providing retailers with better protection than credit cards do. Back in November 2008, in one of the early emails of Satoshi, he parried a compliant from James A. Donald (one of the early BTC adopters), who complained that Bitcoin transactions are not instantaneously final. He said:
“Instant non-reputability is not a feature, but it’s still much faster than existing systems. Paper cheques can bounce up to a week or two later. Credit card transactions can be contested up to 60 to 180 days later. Bitcoin transactions can be sufficiently irreversible in an hour or two.”
Cohen said that, in some cases, chargebacks on credit cards are possible 18 months after the date of the transaction. Credit card chargebacks have two classifications: authorized (where a cardholder authorizes a transaction but not satisfied with the outcome) and unauthorized (when a criminal gains access to a user’s credit card).
Bitcoin’s Mass Adoption Is Affected by the Ubiquity of Fraudsters Using BTC as a Tool
He added that when it comes to digital currency, users might have a chance of recovering their money only when they do not authorize the transaction, as credit firms such as Visa and MasterCard exclude certain industries such as digital currency and gambling from the second category. Cohen said that the large number of scammers that use digital currency as a tool hinders mass adoption. He said:
“Unfortunately, it’s a very nice tool for a scammer to have as a means to collect funds. I think it serves in the disinterest of those who are looking to promote the general and universal usage of crypto. I think it is at this point. It is somewhat of a stumbling block because of all of the people who are getting scammed. I mean, they’re not going to be the ones who are going to be promoting the usage.”
However, digital currency regulations are tightening across the globe, and cashing out of ill-gotten proceeds would increasingly become very difficult for criminals. The US government recently went after BitMEX and its founder for operating an unregistered crypto exchange in a bid to cut down illicit transactions on trading platforms.