Illegal Russian cryptocurrency exchange ChangeNow.io has become notorious for the theft of user’s funds. The company which is known to operate from the offices of a Russian company known as Evercode Labhas scammed yet another user.
A representative of Privcoin.io, a coin mixing service, reported on the bitcointalk.org forum that Privcoin lost between 1 and 20 bitcoins when they attempted to use ChangeNow.io.
On the forum, Privcoin explained that their service, which helps improve privacy by mixing coins from different clients to make the cryptocurrencies untraceable and more fungible, sometimes needs to transact with exchanges like Changelly, Shapeshift and ChangeNow in order to increase their reserves of cryptocurrencies in high demand.
According to Privcoin, they got scammed out of their bitcoins when one of their administrators used ChangeNow to exchange some coins two months ago. Instead of having their transaction go through seamlessly, the Privcoin admin received the following message from the ChangeNow staff;
“According to European AML directives and KYC regulations, we have to ask you to provide a scan or a photo of your ID valid in your country of residence and the additional information of the fund's origin (like trading, mining etc).” - ChangeNow Staff
If you are aware of a previous scam orchestrated by ChangeNow, you might have found their message to the Privcoin administrator very similar to that which was sent to Reddit user ni23457 who was scammed out of 11 bitcoins by ChangeNow.
ChangeNow.io Previously Stole 11 Bitcoins (100 Bitcoin Cash) from Another User
About two months ago, Reddit user ni23457 also complained about having his 100 bitcoin cash stolen by the same crooks at ChangeNow.io. He, unfortunately, ended up in a messy situation when he mistook ChangeNow for the legitimate and honest Changelly cryptocurrency exchange.
Ni23457 had his 100 bitcoin cash frozen when he attempted to exchange them on the so-called anonymous ChangeNow exchange. ChangeNow, like they did in the Privcoin case, demanded identification documents before they the release of the funds would be possible.
They, however, reneged on their promise after ni23457 sent the documents on the second attempt. The fraudsters behind the exchange have instead resorted to more flimsy excuses in order to hold on the 100 bitcoin cash.
The administrators at Privcoin, like ni23457, are not keen on sending any identification documents over to ChangeNow.
They are however willing to remove the bitcointalk post if their bitcoins are returned or their exchange is done. Ni23457 has also revealed on Reddit that he is willing to continue to use the right means to fight for the return of his 11 bitcoins.
The two victims of the shady exchange are also using their stories to caution potential users of ChangeNow. It is highly unlikely that the two are the only users scammed by the exchange. Potential users intending to use ChageNow to exchange large amounts of cryptocurrencies, do so at their own peril.
Hiding Behind AML/KYC to Scam Users
It’s true that most centralized cryptocurrency exchanges are adhering to AML and KYC laws due to pressure from regulators. This development is frustrating enough for cryptocurrency users who now have to deal with the same problems bitcoin was created to help avoid. Even worse is having to experience such problems at the hands of exchanges advertised as anonymous and limitless.
ChangeNow, which is illegally operating in Russia cannot claim to be observing AML and KYC laws when they are hiding from Russian authorities themselves. Updates provided by ni23457 revealed that the men behind the exchange have fled from their offices in St. Petersburg.
Roman Lapin
Lapin, the CEO of ChangeNow, has also made changes to his online profiles on angel.io and LinkedIn to remove any ties to the exchange. Pictured below is evidence of his angel.io profile before and after he made the changes.
The actions of Roman Lapin is clearly that of a criminal on the run and desperately trying to cover his tracks.
The demand for identification documents in order to meet AML and KYC requirements is clearly a means of scamming unsuspecting customers.
As one user on the bitcointalk forum intimated, “entities like ChangeNow are the ones giving crypto a bad name and making it difficult for it to succeed.”