Kraken, one of the world’s largest cryptocurrency exchanges, has recently announced the launch of a fake crypto account aimed at catching fraudsters in the act. The development of this fake account is not entirely new, but it does suggest the exchange’s renewed effort to combat fraud in the cryptocurrency space.
The fake account, known as “Kraken Security Labs Bait Account,” was created to entice would-be phishers, scammers, and other fraudulent actors onto a honeypot. The goal of the honeypot is to collect as much information as possible about the types of attacks and tactics used by these individuals and groups to scam cryptocurrency users.
Kraken security experts believe that developing a deeper understanding of how fraudsters operate and what tactics they use will help them better protect their customers from these threats. The hope is that by baiting fraudsters, the Kraken Security Team can better anticipate the types of scams that are likely to gain momentum and take steps to prevent them from being successful.
Kraken has been working on anti-fraud measures for several years and has been very active in sharing information with the cryptocurrency community about known scams and phishing attempts. However, with this new initiative, Kraken hopes to gain a more comprehensive understanding of the fraud landscape, which it can then use to help other exchanges and the broader community.
While some may question the ethics of creating a fake account to trick fraudsters, Kraken maintains that the goal is not to harm anyone, but to gather intelligence that can be used to better protect users. In an official blog post announcing the launch of the fake account, they stated, “We’ve done our best to isolate this account from any actual customers and minimize potential harms that could arise from it.”
It is worth noting that Kraken is not the first exchange to take this kind of initiative in the fight against cryptocurrency fraud. Other exchanges, including Binance and BitMEX, have also set up similar honeypots to analyze the behavior and tactics of would-be scammers. This coordinated effort by exchanges to combat fraud and phishing attacks is a positive development for the cryptocurrency industry as a whole.
In addition to the honeypot account, Kraken has also launched an initiative that would reward users for identifying and reporting phishing attacks. The company has set up a dedicated email address, [email protected], where users can send information about suspected phishing attempts. If the information is deemed useful and leads to the identification of a successful phishing attack, Kraken will reward the user with up to $1000.
The company views this initiative as an extension of its broader efforts to combat fraud in the cryptocurrency space. In a statement, the Kraken Security Team said, “Phishing attacks are one of the biggest threats in crypto today, and we want to do everything we can to stop them. By offering a reward for reporting phishing attacks, we hope to encourage more people to be vigilant and help us keep the community safe.”
Kraken’s initiative to combat fraud in the cryptocurrency space is a welcome development. However, it is important to note that this is not a problem that can be solved by any one exchange, no matter the size or resources. Fraud and phishing attempts are a persistent problem in the cryptocurrency space, and it requires the concerted effort of the entire industry, including users, developers, and exchanges, to combat them.
As the Kraken Security Team noted in their blog post, “Fighting fraud is a community effort. It requires everyone to stay vigilant and report suspicious activity whenever they see it. By working together, we can make the crypto industry a safer place for everyone.”
In conclusion, Kraken’s development of a fake crypto account to bait fraudsters is a positive step in the fight against cryptocurrency fraud and phishing attempts. While some may question the ethics of creating a fake account to trick fraudsters, Kraken maintains that the goal is not to harm anyone but to gather intelligence that can be used to better protect users. Additionally, Kraken’s initiative to reward users for identifying and reporting phishing attempts is also a welcome development. However, it is important to remember that this is an ongoing battle that requires the concerted effort of the entire cryptocurrency community to combat.
Kraken, a crypto exchange based in the United States, has come up with a novel way of flagging malicious wallets. The method involves building a fake crypto account on the exchange to “scam bait” bad actors. The news emerged after popular streamer Kitboga, whose content revolves around frustrating scammers, revealed in a tweet on May 10 that Kraken had built him a “custom environment” to bait a scammer who was impersonating US President Joe Biden, with whom Kitboga had previously had a run-in around a year ago.
The accompanying video clip shows Kitboga with around $450,000 worth of Bitcoin (BTC) in his Kraken-built fake crypto account. He then shares the screen view of the funds with the scammer via remote computer screen-sharing software that he had tricked Kitboga’s character into downloading. The scammer becomes excited about the sizeable potential payday, but the punchline comes when Kitboga, who is portraying an elderly woman in the video, incorrectly enters the scammer’s wallet address before sending over the entire sum. As a result, the scammer becomes enraged and starts berating Kitboga with a lot of profanity.
The scammer seems to have supplied Kraken-hosted BTC wallet addresses, enabling the crypto exchange to identify them and flag their activity. The Kraken-Kiboga collaboration was possible due to the efforts of Kraken’s chief security officer Nick Percoco and Kitboga. Kitboga has 1.2 million followers on Twitch and three million followers on YouTube. He generally wastes the time of call center scammers by playing characters who are not tech-savvy.
He has even managed to get dubious websites taken down by reporting fraud to the hosting companies that store them. His YouTube profile describes his approach as, “Everyday there are scammers taking advantage of people. I call them to waste their time, walk people through their ‘script’ and lies, report info when I can, and otherwise make light of a dark situation.”
In a video on May 1, Kitboga pointed out a new BTC-related “social security scam” that targets victims via email or text message, claiming that strange purchases have been made using their bank accounts. When victims call the numbers provided, the scammers claim that their identities have been stolen and that they need to withdraw all their cash, buy BTC and send the funds to a “secure government wallet.” Kitboga wasted their time by pretending to have their “grandson” buy 10,000 BTC and sending it to the wrong address.
Kraken’s novel method for flagging malicious wallets shows how exchanges can work together with cybersecurity experts to fight criminal activity in the crypto industry. This development is particularly important as cryptocurrencies become more integrated with mainstream finance and present new opportunities for cybercriminals. By collaborating with cybersecurity experts, exchanges can better protect themselves and their clients against cyber threats.
