‘I guess that’s the price of decentralisation… ’: Understanding scam victimisation experiences in an online cryptocurrency community
| Published date | 01 September 2024 |
| DOI | http://doi.org/10.1177/02697580231215840 |
| Author | Andrew Childs |
| Date | 01 September 2024 |
https://doi.org/10.1177/02697580231215840
International Review of Victimology
2024, Vol. 30(3) 539 –555
© The Author(s) 2024
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DOI: 10.1177/02697580231215840
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‘I guess that’s the price
of decentralisation... ’:
Understanding scam
victimisation experiences
in an online cryptocurrency
community
Andrew Childs
Griffith University, Australia
Abstract
There is a distinct lack of criminological research examining victimisation experiences in emerging
cryptocurrency frauds. At the same time, online cryptocurrency communities have become a
key part of the social milieu of the cryptocurrency ecosystem where scams are commonplace.
Using Reddit forum data from the subreddit r/CryptoCurrency, this exploratory qualitative study
investigates how users in an online cryptocurrency community share knowledge and experiences
of cryptocurrency scams. Thematic analysis revealed how online cryptocurrency communities
discuss scams by (1) arming the community (e.g. newcomer guides, personal disclosures of scam
victimisation, and reflections on the technological affordances in scams); and (2) establishing
community norms in response to cryptocurrency scams (e.g. protecting the community,
‘scambaiting’ practices, normalising scams as an outcome of ‘decentralisation’). Gaining a deeper
understanding of cryptocurrency scam experiences provides timely insights into the intersections
between victims/offenders in digital environments, how we can respond to the recent growth in
cryptocurrency scams, and the variegated ways that victims seek assistance following experiences.
Keywords
Cryptocurrency scams, online community, cyber fraud, Reddit, victims
Cryptocurrency adoption has risen exponentially in recent years. Recent estimates, for example,
suggest that there are approximately 300 million cryptocurrency users worldwide.1 Bitcoin, the
first popularised cryptocurrency, was developed to enable peer-to-peer digital transactions without
Corresponding author:
Andrew Childs, School of Criminology and Criminal Justice, Griffith University, 176 Messines Ridge Road, Mount
Gravatt, QLD 4122, Australia.
Email: a.childs@griffith.edu.au
1215840IRV0010.1177/02697580231215840International Review of VictimologyChilds
research-article2024
Article
540International Review of Victimology 30(3)
the requirement of a third-party institution (e.g. bank). Cryptocurrencies facilitate transactions via
the blockchain: an open-source, immutable, and distributed digital ledger that records information
about transactions between wallets. Although Bitcoin has dominated public discourse on crypto-
currencies, there are currently just under 10,000 cryptocurrencies listed on the popular exchange
platform CoinMarketCap.2 Cryptocurrencies have also developed to accommodate a variety of
use-cases beyond just being a digital currency, as gaming companies and other businesses increas-
ingly consider integrating blockchain technology into their practices (Lee, 2019; Serada et al.,
2020). The adoption of cryptocurrencies has taken place in many regions worldwide as users are
drawn to alternative approaches to the traditional financial systems, the pseudonymous nature of
digital transactions, technological curiosity, and the ability to make payments without the require-
ment of a third-party mediator (Alzahrani and Daim, 2019; Bhimani et al., 2022; Saiedi et al.,
2020).
Despite the increasing diffusion of cryptocurrencies, criminological research in this area is sur-
prisingly lacking. The bulk of criminological research exploring intersections between cryptocur-
rencies/crime has thus far mostly focussed on how cryptocurrencies facilitate the sale of illicit
goods and services (Gundur et al., 2021; Martin, 2014) or other financial crimes (e.g. money
laundering) (Braaten and Vaughn, 2021; Kethineni and Cao, 2020). This paper explores the recent
significant growth in cryptocurrency scams, and specifically, how cryptocurrency users navigate
an ecosystem rife with fraud by participating in online communities. This paper starts with an
overview of the development of fraud and scams in the digital era to situate the rise in cryptocur-
rency scams as further evidence of the continued diversity of scam types in digital environments.
The paper then reviews extant research on cryptocurrency scams, including an overview of the
various types of cryptocurrency scams and how online cryptocurrency communities have become
an integral part of cryptocurrency subcultures in order to disclose scam victimisation and avoid
falling victim to fraudulent cryptocurrency projects. A richer understanding of cryptocurrency
scam victimisation can be achieved by directly studying online cryptocurrency communities, and
this can therefore enable more appropriate appraisal of how victims are responding to cryptocur-
rency scams and how to curb the rapid growth of cryptocurrency scam victimisation.
Scams and frauds in the digital age
An abundance of research exploring the various types of scams, their prevalence, and the psycho-
logical/financial impacts of online fraud victims provides the foundation for examining cryptocur-
rency scams. As daily interactions with digital technologies continues to increase, accelerated in
some ways with changing routines throughout COVID-19, the scale and financial losses from
online frauds likewise continues to accelerate (Australian Competition and Consumer Commission
(ACCC), 2022). While there is not scope in this paper to discuss every type of fraud, some helpful
typologies have been proposed (see Beals et al., 2015; Button and Cross, 2017; Levi, 2017) that
unpack the differences in common fraud types as either against individuals (e.g. investment frauds,
employment frauds, charity frauds, and romance frauds) or against organisations (e.g. fraud against
governments including welfare fraud and insurance fraud).
Corresponding to the many different types of scams listed above there is also recognition that a
one-size-fits-all explanation of victim characteristics is limiting (Whitty, 2020). Namely, there may
be a combination of factors explaining victimisation, including general psychological and disposi-
tional factors (e.g. impulsivity and self-control, risk-taking, and compliance) (Whitty, 2013);
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