- The cyber crimewave offering big returns while cheating its victims out of anything from a few hundred pounds to a million
Rising numbers of Scots are falling prey to sophisticated cryptocurrency scams, according to Police Scotland’s cyber-crime unit.
Lured by the prospect of a quick profit and stellar returns, many people are tempted to invest in digital currencies such as bitcoin.
However, police have warned that the growth in legitimate investments has spawned a parallel crime boom – including fraudulent schemes and also a sophisticated form of theft called ‘crypto-jacking’.
This week a 28-year-old man is due to be sentenced for the theft of bitcoin worth around £160,000 – the first crypto-jacking case to be brought to court in Scotland.
Now one of the leading officers in the police’s rapidly expanding cyber-crime team has told how, in some cases, victims of scams lost more than £1million.
Detective Inspector Craig Potter from Police Scotland’s Cyber Investigations Unit said: ‘The most significant type of cybercrime we are seeing at the moment is cryptocurrency investment frauds.
‘It has been reported in the media that people have become millionaires through early investment in cryptocurrency.
‘There is a lot of social media advertising which is instigating frauds linked to cryptocurrency investment schemes.
‘People are getting tricked into thinking that these are legitimate investments when effectively all they are doing is sending their funds to criminals.
‘Often they are given portfolios that make it look like they are making loads of money but this is not real. Victims are losing everything from a couple of hundred pounds to well over a million.’
Scotland’s first crypto-jacking case involved John-Ross Rennie, whose ‘digital wallet’ was used to transfer stolen cryptocurrency following a robbery at a house in Lanarkshire in March 2020.
The victim, who cannot be named for legal reasons, was forced to transfer the funds by an intruder with a machete.
Rennie’s conviction at the High Court in Glasgow on October 31 was the first that involved tracing the movements of cryptocurrency and police have said they are now able to clamp down on cybercrime like never before.
Despite not being present at the heist, Rennie was described by prosecutors as the ‘technical’ brains behind the crime. He is due to be sentenced on Tuesday after being found guilty of reset – the handling of stolen goods.
Mr Potter said: ‘This was the first case of what we call crypto-jacking where someone is held up specifically to steal their cryptocurrency.
‘It was also the first time that Police Scotland officers were used to produce an expert witness report that was used in court.
‘The case was heard in the High Court so our evidence was challenged by both the prosecution and defence and the court was willing to accept our expert’s evidence in the same way that we have experts in forensics and things like that.’
Mr Potter warned that a rise in crypto-jacking is likely.
He said: ‘I think it will happen again and probably already has, we just haven’t been told about it.
‘Any traditional crime that involves a financial element will happen in the cryptocurrency sphere. We have investigated people trying to buy hitmen on the dark web and even someone trying to buy a puppy in cryptocurrency but not everything ends up in open court.’
The cyber-crime unit has expanded in recent years, despite wider cuts to the force. Three years ago there were five detectives covering the whole of Scotland. Now there are 14 officers, split between three regional teams.
Mr Potter gave advice on how the public can avoid being scammed.
He said: ‘Do your research. The Financial Conduct Authority regulates a lot of the peripheral cryptocurrency services within the UK.
‘So if you are working with an exchange or sending money to a specific investment platform, the FCA should have some regulation around them.’
He added: ‘Cryptocurrency is still quite a gamble in terms of investment so don’t put in money you are afraid to lose.
‘Make sure you aren’t putting all your eggs in one basket and potentially losing your life savings.’
