Why Purchase Risky Cryptocurrencies? An Analysis of the Risks of Victimization

• In Event: Vulnerabilities in a Digitized World: Gender, Risk, and Exploitation Across Global Arenas

Abstract

Created in 2009, cryptocurrency is a new currency with few regulations and no centralized backing. Since its inception, this currency drastically escalated in use and value. Estimates suggest that more than $50 billion in cryptocurrency is being exchanged daily. Bitcoin, the first and most utilized cryptocurrency, has increased by more than 17,000% in the last decade. Although the dominant cryptocurrencies have become mainstream investing instruments, many smaller and newer “coins” are frequently scams. Yet these scams continue to be profitable to their creators. Like other cybercrimes, the general response has been one that encroaches on victim blaming, suggesting that individuals should know not to purchase new and risky cryptocurrencies. This paper examines the motivation behind purchasing risky cryptocurrency. Using criminological theory, we examine how offenders prey upon desperation. Consistent with many crimes, these frauds most frequently affect those from lower socioeconomic classes. However, inconsistent with criminological literature, it appears that fraudsters often do not share the same economic realities as their victims. Specifically, these scams transfer wealth from the impoverished to the affluent.

Author

• Thomas E. Dearden, Virginia Tech