An exit scam is when the owner of an online business takes customers money and then disappears.

This kind of scam was commonly found within the dark markets of the deep web, which use Bitcoin and other cryptocurrencies for payment. This is because the entrepreneurs who run these markets are able to remain anonymous. Users of these markets often deposit funds to the market in order to make purchases, and may hold these funds in ‘escrow’ with the market administrators whilst awaiting delivery of purchased items. If the market grows to a large size this creates a temptation for the anonymous administrator to simply close the site overnight, and disappear with all of the coins held on the market at the time.

Dark web shoppers can protect themselves from falling victim to exit scams by using marketplaces which use multi-sig transactions rather than central escrow – because this means that it is not necessary to hold your coins in the site at all.

The same type of scam is also found in many other areas of business.

Some exits scams can ‘play the long game’, running a business for an extended period of time and sometimes building it up to a substantial size, purely to increase the amount of money that they can eventually disappear with.

« Back to Glossary Index